6 Steps to Real Estate Success

Mike Hambright (00:01.294)
Hey, everybody. Welcome back to the show. Today I’m here with the one and only Rafael Cortez, good friend of mine, beast of a real estate investor, podcaster, male model. What else do you to see in these days? But we’re going to be talking about he really is an engineer. And we talk a lot about systems and operations and how to build a more profitable business. So we’re going to kind of break down areas in your business to systematize more. Sometimes that doesn’t sound sexy, but the result is sexy. The additional money you can make, the additional profit you can pull out of your business. So Rafael.

Thanks for coming in from Phoenix today, buddy. Thanks, brother. Thanks for the invite. It’s always a pleasure. We’ve swapped podcasts a few times over the years, so always good to see you. Always love hanging out with you. Yeah, my audience loves you, man. There’s tons of value every time you show up. It’s because it’s mostly female. The ladies love me. Yeah, I mean, I’m telling you. There’s something there. That’s just a joke. I don’t think they love me. But it makes me feel good briefly. Yeah, so hey, we’re going to be talking about you’ve always been, I know you have a background in organizational psychology, very much in engineering mindset.

And unlike few people, I’ve seen some of the systems that you create. I that’s really your approach is how to systematize your business. And this is generally not for the brand newbie. This is for the person that’s trying to scale. Do you agree with that? Yeah, yeah. mean, it depends on what stage of the business you’re in. But there comes a point where you have to start thinking more methodically about building it up. So tell us your background. For those that don’t know you, I think a lot of people on here probably do know you.

those that don’t, tell us your background and how you got into the business. Well, I started as a firefighter when I was 19 years old. I did that for a few years. While I was there, that’s where I discovered my first mentor, indirect mentor, my captain. And he helped me see things from a bigger perspective, because he would. So I just started paying attention to what this guy was doing.

And then coming into the systems and processes side, I mean, we had SOPs. That’s the first time I ever heard about SOPs, standard operating procedures. Everything at the fire department is an SOP. Sure, yeah. From how you wash the truck, first man pack attack, two man pack attack, all the drills, everything is an SOP. So there’s standardizing on that. When it comes to the testing, you’re going through those processes. You have SOPs, and then you have critical criteria. So it forced me to start seeing things

Mike Hambright (02:25.07)
in a very systematic way, right? Even though before then, I didn’t know what a system or a process was. So that’s kind where it all started. Then I jumped into, I launched my first business, which had nothing to do with real estate, it was a transportation business. Did that for years, sold it back in 2014, but in the interim, I started fixing and flipping in 2009. So I started fixing and flipping while I had this other business, and then started wholesaling.

a couple years after I started fixing and flipping. And so I kind of did it backwards. But like I said earlier, there comes a point where you’re doing so many things, you’re going to get bottlenecked. So I started thinking about, how were we able to do all those things back at the fire department? The way that I built the transportation business was very methodical as well. So it’s all systems and processes and ops. And like you said, it’s not the sexy conversation, but.

Ultimately, think as entrepreneurs we’re looking for freedom. We’re looking for this next level life. We can’t get that we’re working all the time, man. That’s right. Yeah, there’s no doubt. I think it’s like you can have if you if you can operate a Smooth business and I think a lot of people you know Especially if you’re newer like we’re like this business is not like HGTV like you know, it’s messy right? There’s too much drama like if you have drama in your business your business is suffering, right? Yeah

You want no drama in your business, which doesn’t make it sexy, but if you run a smooth ship, can get sexy. The benefit of running a smooth ship is a sexy lifestyle, right? Whatever that means for you. Yeah. Well, mean, if I didn’t have, for example, the stuff I have in place, I wouldn’t be able to take off on a Wednesday and come hang out with me. Yeah. In Dallas. You putting out a fire right now? Yeah, exactly.

fighting with a contractor or something? Yeah, and not to say that you completely step away from it. I mean, I’m an operator at heart. So I’m still tapped into what’s going on and whatnot, but it’s more of a consultant base, as opposed to me pulling all the levers and the buttons and pushing the buttons and all that stuff. you still have this big part of the operation, I think.

Mike Hambright (04:43.458)
But the heavy lifting is done by everything else. Yeah. So we’re going to get into just talking about how to systematize some key areas of your business. And today we’re going to go over sourcing or marketing, like Legion, how to convert those, how to be better at acquisitions, dispositions. And most importantly, the part that you said a lot of people leave out is measuring those things so you can continue to improve the performance of those things. A lot of people just set up a process and forget about it and.

I was talking about this with somebody yesterday. A lot of SOPs or processes, you create a checklist or whatever, is almost outdated the moment you finish it. These things live on forever, right? And I think a lot of entrepreneurs set it up, and then they use it for a little while, and they’re like, well, they start to get some scope creep where they start doing it a little bit differently.

And they’re like, well, we have this process, but it’s out of date. And so just do it like this. The next thing you know, you’re not even doing the process you created, because people aren’t maintaining them over time. Yeah, they’re not maintaining them. I mean, they become outdated. And then people, like you said, they deviate from the process itself. So they stop fine tuning. And next thing you know, you feel like you have SOPs in place, but they’re not working. don’t know.

It’s accountability. So like you said, it is a living process. It’s a living document. Every SOP is going to be a living document, especially, man, think about it, right? We’re living dog years when it comes to real estate. Everything moves so quick. mean, marketing strategies change from one month to the next. Policy hits, red tape hits, and then boom, you’ve got to scrap out half of whatever your sourcing strategy was.

and do something else in place. You need to have things in place that you can lean on to just be able to keep adding stuff and modifying your business and improving it. And more importantly, you’ve got to have the team on board, which is the whole other 70 % of it. Let’s talk about how you, I mean, I could see you as the owner talking about how to keep the SOPs fresh and redefine the process. But a lot of the.

Mike Hambright (06:54.142)
your intention is really to kind of hand off, this is a process to somebody that’s going to go do the job. in my experience, it’s hard to have somebody that like does the job and is also thinking about how to continue to keep those SOPs fresh, how to continue to improve the process. we tend to kind of sometimes hire just a person that just does the job. And that’s fine for a while until the role changes, right? And they don’t necessarily keep those things up to date so that if somebody else had to step in that role, they could just grab that.

process document or checklist or whatever it is and just run with it because they didn’t keep it up to date. Yeah. So I think, mean, when we’re looking at something and have a 30,000 foot view of it, we’re going to have a.

We need to know enough about every single aspect of the business so that we’re dangerous in it. We don’t need to be the expert, right? For example, I don’t need to be the best Dispo guy in the world. But I can hire somebody who’s going to be way better at it than me. The thing too is that if we have stoppers, if we have somewhat safeguards, them, Operational safeguards, we can create this lane that can become really, really good at this one lane.

and then we can empower them to, hey, if there’s something that you see that might work better, let me know. Let’s voice it out. Let’s play with it. Let’s brainstorm on it. We’ll try it out. I do that with my entire team, from the VAs to my operations manager. It’s like, what are you guys seeing that I’m not seeing? Now, my job is to not be so much in the weeds that I can’t see beyond that.

I need to be able to look at the thing from up here and then see all the lanes and how they’re operating. Where are the bottlenecks? When I’m designing this, right? After a period of time, I delegate that to my director of operations and we have this way of him finding out where the bottlenecks are through KPIs and tractors. But it’s important, right, to just one, have a clear identity of each one of the lanes, right?

Mike Hambright (08:59.414)
what role goes into each one of the lanes, and then people are gonna be able to become really, really good at that lane, not necessarily master of all. One thing that I see often is, I’m gonna hire an acquisitions person. And then that acquisition person has to do the cold calling, the sourcing. They have to do the pre-qualification. They also have to do a negotiation. And sometimes, you know what, you already have the relationship built out, just display the deal.

And they’re doing four or five different lanes that are not specialized. You know what I mean? Well, and one of the things that you said a moment ago is you kind have your operations manager keep an eye out. But not everybody has an operations manager, right? It’s like the owner. And a lot of times, their skill set is they’re just, they kind of cut their teeth on being good at acquisitions. They just hustled in there. The kind of sales guy or saleswoman, right?

And the other stuff is just stuff you have to do once you acquire something, right? And you just kind of hustle your way to it. So you’re often not thinking about how to improve each thing, like a factory, like you do. You run like a production line, right? Yeah, pretty much. not everybody thinks that way. And then not everybody has the kind of operations manager that’s kind of making sure that each of those processes is redefined frequently.

Right, one thing I think it’s important to understand too, that we’re going to create roles within the business, right? So for example, even right now if you’re a solopreneur and you’re operating, you have a wholesale business, understand that you’re going to be the VA, you’re going to be the call caller, you are the acquisitions rep, you are the transaction coordinator, you are the disposal rep, you are the director of operations, you’re wearing all the hats. So one of the first things, for example, that I emphasize is,

Identifying which role is what, which lane is what, because then we know what to hire for. And you start filling in those little gaps that create bottlenecks. So I didn’t start off with the director of operations. And as a matter of fact, for many years I didn’t have, I was filling up that role. And if you look at my organizational matrix, I do have a director of operations. So basically me as the owner, I have one-on-one meetings and sit downs with the director of operations.

Mike Hambright (11:16.366)
We do huddles, I’ll jump into the huddles, but my director of operation runs them. I don’t run the huddles. And then everybody else reports to him, right? So instead of me talking to the acquisitions manager, the display manager, the VAs and having all these conversations, everything just kind of funnels over to this one person that needs to have a pulse on the accountability of the business, right? And I talk to that person, that allows me to say, this is what we’re seeing, this is what we’re not seeing. So I get to…

to dissect it, I guess, from an easier standpoint once it’s been processed. But for that to happen, again, you have to have the lanes. For example, I break down the business into six different lanes or stages. First one is going to be sourcing. And when you’re sourcing, you’re looking for, let’s use wholesaling as a model here. But this framework, I literally use it.

for the brokerage. When I do consulting on businesses, just period, and I’m working with a chiropractic clinic right now, I’ve done gyms, restaurants, and stuff like that, the framework, it’s still the same. You’re gonna source, you have to source your clientele. So you source your clients, mean, in wholesaling, we can do cold calling, we do pay per click, we do, which is, mean, right now it’s killing it, by the way. We do direct mail, we do all those different points of…

marketing channels. we push them over to that second lane which is prequalification or conversion. So if you have a thousand records that you hit, that you source, you don’t want those one thousand records going to acquisitions because they’re going to bottleneck the process there. So you want to have a way of de-qualifying people and that’s where that conversion process comes in.

When I was sourcing originally, I would just get everything done from the get-go and push it over to acquisitions. And I mean, it was just a cluster. It was a lot of bad leads. We felt like we were super busy, but we were just talking to bad leads. So when I rolled out the prequalification or the conversion stage, we started de-qualifying a lot. And then the numbers got better, right? So you source 1,000 records per se. 100 of those end up being somebody that we can actually make an offer to.

Mike Hambright (13:36.234)
And then out of those, maybe 10 end up working with our acquisitions reps. So in the conversion stage for real estate investors, that would probably be a role of like a lead manager that’s taking calls, qualifying them, getting rid of the junk that’s not going to turn into anything so that your acquisitions or sales team isn’t talking to everybody that can fog a mirror. They’re just talking to the people that their expectations are reset, they’re qualified, they are looking to sell their house at a discount or things like that.

Yeah, and there’s a specific conversation that takes place there, but yes, you are going through that de-qualification conversation. And then, again, every lane has a role, right? So lead managers are in the conversion stage. On the sourcing, you’re to have your cold callers. You’re going to have your operations in the direct mail process and PPC team. So it’s different roles in those lanes. And you get to…

the third one is gonna be acquisitions. So, that one’s pretty self-explanatory, the way that I break it down to my acquisition guys is like, yeah, one job. Negotiate the signature, right? The follow-up goes into there. And I mean, I feel like that role right there, it’s very different than, for example, having a cold-collar responsibility, right?

The turnover is a lot higher on the cold calling. And so I have a big, like it just creates conflict in my heart and my mind when somebody is like, yes, my acquisition rep is cold calling as well. They’re sourcing their own leads. You’re gonna burn them out. The skills are different. The patience is different. So. And you said follow up, you consider that part of the acquisitions kind of stage. So you have your acquisition people doing probably not all follow up, but some follow up. Yeah, yeah.

So part of the SOP on acquisitions that we have is we go through this standard procedure, where we call back to back three times and go through this whole thing. Then we get to this point where if they ghost us, if they start ignoring us, and three times we go through three days of calling, calling a couple times, if they start ignoring us, they send them back to the lead manager. So we kick them back a level, right, to that conversion stage again.

Mike Hambright (15:55.822)
and they take over the follow-up, so my acquisition people are not swamped. So when we roll in in morning and open up the CRM and we look at what’s on the schedule for today, those are actual leads. They’re not dead follow-ups that we’ve been trying to get on the phone for a month on the acquisition side. So that’s stage three is acquisitions. And of course, you lock up the contract, you get negotiated, then you push it over to

to your Dispo team, your Dispo managers. In my Dispo lane, do have, mean, it’s the most, I think it’s the heaviest workload of the entire business. So for example, I have two VAs in there that are doing the advertising of the deals. So they put together the website polls, they upload to InvestorLift, they do the email sequences and all that stuff. My Dispo manager,

And just both sales rep I mean all they’re doing is jumping on the phone taking calls in and then calling their VIP buyers list Actually picking up the phone and having conversations because I want them having sales calls sales calls sales calls sales calls So it like as you can see right do you have this conveyor belt of? One the lane that they’re working on the roles that you know have to be fulfilled in each one of those lanes And then each one of those lanes also has an SOP for accountability. Yeah

So let’s, we might dive back into some of these, like Dispo, for example, I think right away in terms of, we can kind of position this whole show as like finding ways to squeeze more juice out of that fruit that you already have, like how to improve operations to build a more profitable business. For too long, and I think obviously Dispo has been a challenge over the past couple of years, not as easy as it has been in years past, right? Is you have your Dispo folks on the phone calling.

potential buyers to talk about a deal where most people are just spraying and praying. They’re kind of putting it online somewhere on their website or some platform and blasting it out and just seeing what happens. Or they might put it in a system and text out an email or text, right? But you’re calling people. So just talk about that because a lot of people are leaving money on the table by not.

Mike Hambright (18:09.294)
actively having conversations with people, because everybody’s tuned out to getting hundreds of emails a day, and a bunch of spammy texts, and stuff like that. So just talk about that a bit. Yeah, it’s, I mean, we’re still in the people business. So what my Dispo team, my manager, my reps, I mean, their main role is to create relationships with buyers in all these markets. And we started doing virtual wholesaling, so it became even more important. And so we have

We have this very robust process. I have a 21 day dispo process that includes doing everything short of putting a banner in the sky with a plane about a property that we get. So it’s very robust. I’ve your process is good. And that’s the VA team handling that part. So it’s not a crazy budget break right there because VA is doing it. But what happens is that that process of posting and going through all these

these steps generates inbound calls, right? So that’s one way of keeping the guys busy on actual conversations. It’s strictly prohibited to negotiate deals via text. There’s one dude that we do that with just because he’s a beast and we know how he operates. Shout out to Spencer Caldwell in the valley over there in Phoenix. But I mean, this guy, if you know Spencer, you know that all he does is negotiate, but he buys you clothes, right? So we have that relationship.

But they’re strictly prohibited from negotiating deals over text. Jump on a call, have a conversation with them, build a relationship, know what they want, right? And that’s essentially the crazy thing, is that’s what we start doing when we get into the business. We’re catering, we’re having this attention to detail in the customer support process and everything. And as soon as we start locking up a few deals or we hire, we let go of that. And that’s when people start forgetting about what we do.

Yeah, I saw this was completely unrelated and I’m just saying this off the cuff, but I saw somebody yesterday post something on social media and then I know this is like super tangent here, but they posted something and then they commented on their own posts like Here’s like six steps on how to do something and it was like six posts six comments. Mm-hmm. Somebody’s like what tool are you using to?

Mike Hambright (20:29.006)
automatically do all these comments on your own posts. And in my mind, I’m like, there’s nothing, they did this manually. But it’s just funny that a lot of entrepreneurs go like, how do I push a button and not have to really do this stuff? And there’s some things that, especially relationship things, that, I mean, that’s the problem is everybody’s numb to getting six million emails a day and texts blowing up all the time. The art that’s lost is the actual relationship piece, right? Which is crazy.

Yeah, it absolutely is. And the whole point of doing all this activity and pushing the deals out and all this work and hiring and locking up, it’s so we can have somebody to talk to about a deal that we have. I think at least the market does not lend itself to do that right now. Go back to 2020 when inventory was nothing.

And yeah, you throw a property out there and the people would just snatch it They didn’t care where it came from because there was no, you know, there was no supply and there was a lot of man It’s not it’s not the case. Yeah, even then you I think you probably agree with me if you were doing it with your style of building relationships with people People were just getting sloppy and it was easy Yeah, they probably could have gotten another three to five grand on a deal or maybe more just by having those personal relations exactly now another thing that happens to is like maybe

You know when you don’t build the personal relationships, you’re leaving a ton of money on the table You’re leaving a lot of money because you’re not you’re not building your buyers list for example the the VA is that I have they I mean their workload is pretty it’s pretty heavy and they I mean they go in they start scraping emails from from social media They’ll send out communications text messages and do a file my radius so they start reaching out Virtually, right electronically like they don’t pick up the phone and call

Buyers, but they’ll send messages out and capture all those messages when they come in my team my dispo guys get it and And we start generating buyers every single week. We’re adding I don’t know we call it 20 30 buyers to the buyers list that went through it so we’re building up that their buyer list and and that’s that’s what allows you to sell the the Deals at a higher price if you’re selling to the same guys all the time You know you become employed. Yeah. Yeah, I kind of give this joke. had there’s a

Mike Hambright (22:51.662)
a while back I was wholesaling deals to a guy, I think I sold him three or four deals and then Vinny started asking like, hey man, I’m a good customer, can you knock like five grand off of this one? I’m like, 5,000 bucks, how would I buy you a beer? I 5,000 dollars is a of money. But there’s a lot of people and I’ve kind of mentored some people that are in our mastermind and stuff like that that keep selling to the same five or 10 people and I was like, you’re leaving money on the table by night. Because there just starts to be,

You’re going after convenience. And it’s easier, you’re leaving money on the table. Yeah. And again, SOPs, having a standardized process is what lets you, for example, do all that kind of stuff and still not be sitting in front of the computer for 23 hours a day. Yeah. So yeah, I that’s the disposal process. I think the relationship building part of it is the thing that I lean on the most.

It’s not, how many text messages did you send? I don’t care. We can send out 5,000 text messages through launch control in two seconds. Yeah, exactly. How many conversations did you have? Where are we at on this? My Dispo team also has a transaction coordinator. So we have an in-house transaction coordinator that makes everything easier. the roles on just the Dispo alone, right? You have the sales.

Team you have the VA’s and then you have the transaction coordinator. Those are every role has different SOPs So every every role has her own like for example, we get we get a property through or into whiteboard we call it whiteboard when you know inventory and it triggers a starting process for each one of those people, right so as Escrow is being opened by transaction coordinator. The marketing campaign is being kicked off by the by the VA team

And then the disposal sales guys already picking up the phone and having conversations. All this happens within an hour of us getting a deal through the door. So again, you can’t do that kind of stuff without SOPs. One thing that makes it all work, and this is the glue, is morning huddles. As simple as it sounds, morning huddles. They don’t have to be super, yeah, every day they don’t have to be super long. mean, our huddles are about 15 minutes long. My entire team is virtual.

Mike Hambright (25:18.138)
And it’s where are we at? What do we need help with? We go through TC, we go through acquisitions, we go through a dispo. Real quick, what’s live on the board? And then everybody just goes into their daily, right? So it’s kind of like the morning kickoff call. It just energizes the team, puts everybody on the same page. And that’s what keeps the accountability and the SOPs alive.

Because when the question comes up, it’s like, OK, what do I have to do now? What does the SOP say? You always take your people back to the SOPs. Yeah, go back to. Yeah. Yeah, so far we’ve got over sourcing, converting, acquisitions, and dispositions. So what else is? The last two, usually what happens, and I probably say it a million times to you, but.

somebody will sell a deal, they’ll go right back to sourcing, right? So they’ll go right back to the cold call, to the first step of the process. again. Yeah, start over again. But if you’re not tracking your KPIs, if you don’t know what your cost per lead is, if you’re just aware of what’s bringing in the revenue on a regular basis for you, for example, you’re not going to be able to improve, right? You’re not going to be able to improve, and you’re not going be able to…

to scale or even plug people into it because it’s really hard to keep people accountable when we don’t know what they need to be fulfilling on. We know the tasks, but if you want to get pragmatic on this, like my call calling team, they have to dial, they got to have 80 to 120 conversations. That’s a number, boom. That’s something that we can hit. So you start to create KPIs.

for each one of lanes, each one of the roles. I mean, you guys are KPI tracking all that. We talk about that all the time. So having a good scorecard, having a good guide that allows you to not just track what happened, but forecast where you can be if you keep up the trend is a very, important tool. So measure every deal. After we close, we see what happened with the deal.

Mike Hambright (27:34.326)
how long did it take for this deal to close, what campaign did it come from, how much did we spend to get this particular deal, and then you start to create this picture after a while, it takes time, right, but after a while you start to create this picture and it’s like, okay, cool, my money is better invested if I go down the direct mail route than if I do the cold calling. So what do do? You do that. Having the numbers in one place and as silly as it sounds, not.

Not a lot of people have improvement sessions. So yeah, we track the KPIs and usually we know what the numbers are, but you don’t proactively get into this habit of, okay, we have the metrics, how can we improve them? And we have this set of questions that we go and we just answer after every deal. it takes us, mean, realistically, man, I think it takes us maybe 15, 20 minutes.

to dissect the deal from beginning to end on the measuring part and then the improvement little session about it. And these are asking every person on your team, just kind of going through the whole factory, the whole production line, and saying, what could we have done better here or there? Correct. And we do those on an operations meeting. So I do have an ops meeting, which is longer. It’s 60 minutes. If we were loaded, we were really backed up on stuff, it would be 90 minutes. Those happen usually on Tuesdays. So we kick those off on Tuesdays. But every other day, we have a huddle.

So on the operations meeting, it’s like, OK, what did we close last week? OK, where did we leave money on the table? Do we have to renegotiate because of timelines? And sometimes, like for example, a recent one, right? We had to do an extension because we were playing with the idea of not opening escrow until we had a buyer for it, right? Because I mean, there is an attrition percentage. Sure. So like, OK, let’s see how we can make it lighter. So we didn’t open escrow.

We ended up opening escrow when we found a buyer, but then we had to get an extension for the deal, right? We thought it was going to close off, close well, but we had to go through a quick probate and that pushed the closing date two weeks and whatnot. The only reason we were able to keep that together is because we sacrificed a 5K additional pay for the seller, right? So we wouldn’t have had to do that if we just had…

Mike Hambright (29:56.43)
gone down the regular route and just open escrow right out of the gate. So it’s things like that. You were doing that to try to save effort, like why open escrow if you don’t have a buyer yet? Yeah, exactly. we’ll send, when we send escrows to a title agency, a lot of times they’ll, depending on the title agency, especially when you’re doing virtual, in my market I really don’t have that problem. But we’re kind of, we’re testing out title companies, we’re trying to see how quickly somebody moves.

how slow somebody moves. And for that particular deal, like, let’s try it out this way. Let’s just get a buyer in place, open it, and when we have 10, 15 days to close on it, we need it more time. So that’s like, for example, one case where we’re going down the measuring route, knowing what was the thing that delayed it, and keeping track of that stuff. So now, we have it as an SOP to just, you

revert back to the original plan, which is open escrow. Yeah, yeah. And you don’t realize that there’s improvement there. Everybody realizes there’s improvement there. But if you don’t have these kind after action reviews, like these improvement meetings or improvement conversations even, then you’re just like, it really never gets documented. It never makes its way back into the SOPs, right? Yeah. And then, for example, the transaction coordinator leaves, right?

A question that’s going to come up inevitably is when do I open escrow when you hire the next one? So that’s already in DSOP. And we’ve tried it a couple different ways. This is the best way. So it’s things like that. As you’re going through that process, you start tweaking, and then you start to polish. You continue to polish. But you’ve got to use the people, too, that you have in place. mean, they’re talented. We hire them for a reason. They’re your front line. They’re the boots on the ground. They’re seeing everything.

So going into it, all these roles and lanes, they’re going to be there regardless of whether you have a team of 10, 15, 20, or if you’re a solo operator. It’s just understanding which role you’re fulfilling at which time and where your bottlenecks are. Yeah. And what’s number six here? What’s after that? The improvement session. was a. I see. Oh, measuring and Yeah, measuring and improving. Yeah. So let’s talk a little about mindset. what?

Mike Hambright (32:16.302)
This has been an interesting couple of years, to say the least, for lot of folks. I know you talk a lot about mindset, having the right mindset. Let’s talk about that, what it takes to be successful in this market. Because a lot of people’s cheese got moved, right? And some people didn’t know how to find it. They didn’t know how to move with it. But I also know people that have been crushing it through this whole thing. And a lot of it is that they have great systems and processes in place, where the better operators have fared well.

having the mindset to allow change, to allow a pivot, and some people are just trying to do it the way they’ve always done it, and obviously crash and burn, maybe. So let’s talk a little bit about what mindset does it take to be successful in this market? I think now more than ever, it’s important to be nimble and just understand that things are moving quick. I may be 20 years into the business, but 20 years is 20 years ago. know what I mean? Like the stuff that was working.

Heck, even a year and a half ago is not necessarily as efficient or effective now. Just understanding that part, again, like I said, we’re living dog years, and we have to be more tapped in than ever to what’s working, what’s not working. And not that you want to reshape the company every month, but be aware of the stuff that’s in play. Understand that, yeah, there’s going to be policy that comes up. There’s going to be red tape that just, you

Out of the blue, it wasn’t there last month, now it is. If you’re not tracking, you’re not keeping a tab of some type of metric or form or the numbers of your business, you’re not gonna be able to catch that stuff. The reason we’re crushing it, I we’ve seen it. Honestly, I like seasons like this because it thins out the herd. Since I started in 2009, I mean, I’ve seen it more than a handful of times, right?

where it gets a little tough and then next thing you know, there’s less offers out there. There’s more people jumping into, I don’t know, drop shipping or something. Crypto. Yeah, exactly. jumping from the vertical. But I like it because when it thins out the herd, and then the operators that are serious about it build up the business, and it’s really an opportunity zone. So that’s how I like to see it. I think the mindset is like, man, I don’t know everything.

Mike Hambright (34:38.454)
I have systems and processes in place, but it doesn’t mean that they can’t be improved. It doesn’t mean that the team knows everything. We’ve been doing things for the last three years this way. I mean, why can’t we tweak it and improve a little bit? Another thing that rolls right into that is what kind of relationships and resources are you stacking, right? If you’re not jumping into masterminds, if you’re not having conversations with people who are further ahead than you, I mean, you’re really missing out on gold out.

Again, it just cracks your skull open to a different perspective. Yeah, yeah. It helps you see what’s possible. Yeah. We have a lot of preconceived nervousness. Oh, that doesn’t work. Oh, well, let me tell you why it’s working for me. Yeah. Yeah, exactly. And I mean, think now it’s just more important than ever to be a student. I mean, we’re students. Yeah, no doubt. You’ve got to be a lifelong student. Yeah, exactly. So let me ask you a little offshoot here. So are you using AI in your business at all yet?

You have a very systematic approach to things. And if you are or you’re not, what are you doing? where do you see opportunities to integrate that into your, as an operator or a real estate investor, where do you see those opportunities? The biggest bottlenecks are on the long-term follow-up. That’s where we identify the biggest bottleneck. Our short-term follow-up is pretty dialed in when we very adamant about it. But of course, waste has to go somewhere.

And when I say waste, don’t mean waste leads, but the effort that we have to put into all this. So it’s gotta go somewhere. So next thing you know, like okay, your long term follow up is super stacked and you need to hire more people just for that specific purpose. That’s where I’m rolling AI into. I mean now there’s so many things, mean conversational, messaging and just the phone calls, the voice. I mean know I’ve talked to AI.

when I think that I’m talking to somebody and I’m aware of what’s going on, right? So I should be able to capture that stuff, but it’s so good in some of these aspects that you can’t even see it. Yeah, and just imagine it even six months or a year from now. It’s gonna be wild. If you’re not tapping into something like that, I mean, I think you’re gonna be left behind. So that’s where we’re rolling it initially for more of a setter role than anything else. So still not negotiating, not running.

Mike Hambright (36:59.726)
automatic analysis where just all the numbers. mean, there’s programs out there that give you all the numbers and the stats. We still put eyes on properties and values. So yeah, mean, that’s where we’re at on that. Yeah, that’s great. Yeah, I think a lot of real estate investors would love the idea of not doing any of the work. And maybe AI can take this all on. But I think that building the relationships, constantly reviewing your process and refining it. A lot of the people that I know in this business,

that have done super well from those that are just kind of getting by, they do a bunch of little things better. They do a bunch of things a little bit better. It’s not like something transformational. It’s just they refine their process. They follow up a little bit better. They personalize it a little bit more. It’s just a bunch of little things that can have a transformational result on your profit, right? Yeah. No, absolutely. And it’s those little tweaks that, I mean, if they improve you 1 %

You know, it’s, mean, that reflects on the bottom line. So yeah, when it comes to systems and processes, if you want to kind of just recap it, you got to have an organizational matrix, know what your company looks like, right? Know the lanes in your company, the roles inside those lanes, and then the SOPs for each one of those roles. That’s how I think about it when I’m…

systemizing some. And for folks, you have an advanced approach to this now. I know you share a lot of these things with other people too. But for folks that don’t have any SOPs, they don’t have processes created, how do they give some kind of guidance on how to start that? Is it just by creating checklists and writing down, then we do this, then we do this, then we do this? Or how do you start that process? Really good question. The processes and the systems are not important until you start generating revenue.

So focus on the money. Focus on the revenue at first. Money making activities. If you’re getting started, if you’re getting going, and whatever vertical you’re in, focus on, you can’t have systems and processes and people if you can’t keep the lights on. Focus on income. And if that entails, what you can do right now is go door knock. Pen and paper.

Mike Hambright (39:18.636)
You don’t have to, yeah, exactly. You don’t have to have this robust CRM to get, you know, to kick off. It’s different. It’s like reading a 30 chapter book and you wanting to start in chapter 20, right? And it’s really what it comes down to. No, have to go through the first 20 chapters of that book to get to the point where, systems and processes is now a thing. So yeah, I I do get that question quite a bit, especially from people getting into it.

We will use systems and processes to justify analysis paralysis. I was like, oh, I got to get my SOPs or my pro. No, just pick up the phone. Have a conversation. Go door knock. Pull a list. And I there’s a simple. I actually teach it for free. So how to get to that first deal within 30 days. it’s very, I mean, the approach is linear. But you don’t have to have automations in place yet.

Just focus on the cash get some revenue in and then as you’re gonna get as you get revenue in you’re gonna get new problems Right and start working those problems one at a time. Yeah. Yeah, awesome Yeah, if folks want to learn more about you, obviously you’ve got your podcast you we’re working folks kind of go and learn more follow along connect I’m very active on social media Instagram is I respond to all my messages myself Rafael Cortez CEO that’s my handle on Instagram at Rafael Cortez CEO

My YouTube channel is also Rafael Cortes CEO. have a ton of videos in there. And then I do have a free webinar. It’s REIwholesaling.com. That’s the website, REIwholesaling.com. And on that one, I I do an hour breakdown of what you need to do to get to your first deal. I break down the, I simplify what we talked about right now. I simplify it for somebody who’s getting started. So it’s on there.

newer folks. Cool. Well, thanks for joining me today. Thanks for coming in from Phoenix. I appreciate it. Always great to see you. Yeah. Thank you so much for the invite, We got to do it again. Absolutely. Name it. All right. Thanks again for joining us. So everybody, if you’re not following guys like Rafael, you need to be. So we’re going to put the links down below so you can follow along with what he’s working on. If you’re trying to scale your business and get to the next level, he’s an expert at helping you get out of your own way and kind of create some of these processes ultimately. So hope you guys got some good value from today. This business.

Mike Hambright (41:41.676)
gets better as you start to scale it up. Otherwise, it can become a job. so not that you maybe get pulled out completely ever or for a long time from now, but there definitely is an easier way. And Rafael can kind of show you the way. And so can we. Keep following us here at Investor Fuel. Appreciate you a bunch. We’ll see you on the next show. Take care. Boom.