Survive and Thrive: Wholesaling in 2025 and Beyond with Jerry Norton

Mike Hambright (00:00)
Hey everybody, welcome back to the show today. I’m here with the one and only Jerry Norton, a good friend of mine, old friend. We’ve been around a long time. We just had a discussion. The first time he was on my original podcast, Flip Nerd, we think was about 13 years ago. Hard to believe that it’s like a lifetime in this business, but we’re to be talking about the future of wholesaling today. Some really exciting stuff like where are going with AI? What the future is, what’s in store for kind of virtual wholesaling, which has been popular over the last few years, regulation and a lot of stuff that’s going to impact all of us. So

This is going to be a fantastic show from somebody that’s done a ton of deals is really has his ear to the ground a lot like me in lot of ways, like just knows everybody and knows exactly what’s going on. So a couple of basically good looking, really smart dudes on this show. So you don’t want to miss it. So hey, Jerry, good to see you, buddy. Yeah, that’s right. That’s right. We’re trying to learn some new tricks,

Jerry Norton (00:46)
a couple of old dogs too, a couple of dinosaurs.

Yeah, and I think Mike, you you have to, in real estate and business, the way markets shift, the way technology is advancing right now, you kind of need to be one step ahead to stay relevant. And if you’re not kind of having your eye on the future, you you take steps today, but you got to be thinking what’s going on five steps down the road here.

then you can very quickly become obsolete. And we’re seeing that happen quite a bit. If you’re hanging on to yesterday’s strategies and you’re not adapting quickly, then you’re going to fall behind, I think, in this business.

Mike Hambright (01:27)
Yeah, no doubt. I think, you know, we’re talking about the future of wholesaling today and that’s a perfect, a lot of wholesalers are very transactional and they’re not thinking about next year. They’re not thinking about five years from now even. And so hopefully this is little bit of a wake up call. The reality is for any entrepreneur, you know, if you’re very transactional and you’re not looking for how to be relevant in two, three, five, 10 years from now, then your days are probably numbered anyway.

Jerry Norton (01:53)
And there’s some big things on the horizon that are transforming this business. mean, first of all, we know it’s a multi-billion dollar business. So wholesaling is huge now. It’s in every single market. It’s the number one mode of transferring distressed properties to investors. I mean, this is interesting fact, Mike, you might not know, but the national

Mike Hambright (01:58)
Yeah.

Mm-hmm.

Jerry Norton (02:19)
the private money, or how do they say it? The private lender, National Association of Private Lenders, there we go. ⁓ They’re a pretty big association and they went back to all of their lenders and they surveyed where their deal source is for their borrowers, which are investors. And they said it was something like nearly 80 % of all of their loans were sourced by wholesalers.

Mike Hambright (02:38)
Right.

Yeah, yeah, wow.

Jerry Norton (02:47)
So

to put in perspective, wholesaling is huge. I I told you off the show, you take the wholesaler out of the real estate investing equation, what are we left with? It would completely change the game without wholesaling. And so any shifts in that industry are going to massively impact the rest of the community.

Mike Hambright (02:58)
Yeah.

for sure. Hey, before we jump in all these topics today, because I think it’s going to be a great conversation, I know it is, tell us a little bit about you and your background, if there’s anybody that’s watching this right now that doesn’t know who you are yet.

Jerry Norton (03:15)
Yeah.

Yeah, so we were joking earlier, been around a long time, full time for over 20 years. I got going in 04. ⁓

And so back then, know, whole sailing was sort of like ⁓ an obscure strategy. No one really talked about it. There wasn’t much information on it. You know, nothing like what it is today. And so I started out there, you know, it’s transitioned in time into flipping. So started doing some fix and flip got pretty good at that. This is all local in the Detroit Metro market.

And did that for some time, got really good at it. I’d have 10, 15 projects going on at a time. Plus I’m wholesaling all in Metro Detroit. The wife and I decided we wanted to take our six kids at the time and do an RV trip. We homeschooled and so we sold everything, you know, got rid of the house, the cars, the boats, all the stuff. And we loaded everybody up in an RV, attached the suburban and we did a year long RV trip in 2013.

And at that point, I switched to virtual, not because I thought it was a great idea, just because I wasn’t there, you know? And so it forced me to learn, you know, how to manage the business remotely. And it was probably the best decision I ever made because I realized I was the bottleneck in a lot of what I was doing. You know, I had to touch everything and I was stressed out. Like I was working hard. It wasn’t all the dream I had for entrepreneurship, you know? And then when I went on the RV trip,

Mike Hambright (04:24)
Yeah.

Ha ha.

Jerry Norton (04:45)
You know, I was working less, doing more. I made more money that year in the RV than any year previously in real estate. And I worked half as much. so because I realized, you know, I’m not there, so I got to put the right systems, the right processes, the right people. And, you know, it was a learning curve, but I started to figure that out. I figured, you know what, I can do this anywhere. If I could do it there, I could do it anywhere. So I started doing deals nationwide, ⁓ you know, flipping, even flipping nationwide.

Mike Hambright (05:00)
right?

Jerry Norton (05:14)
And one of the things that I’ve always done is I’ve tried to push myself out of my comfort zone. And in real estate for me, that meant doing higher margin. ⁓

So while I was still heavy and transacting, I started to move into higher price points. And so then I was doing million dollar homes. Some of this was new construction, all spec, you know, like I wasn’t doing subdivisions necessarily, but I was, I’d buy an infill lot. I’d build this house. It’s sold for a million bucks. And I got pretty good at that. Then I moved to Scottsdale, Arizona, and I tried to move into the three to $6 million luxury, you know, construction and flipping.

Mike Hambright (05:49)
Hmm.

Jerry Norton (05:53)
Took me a little while, but I figured that out and you know started doing million dollar profit deals on the luxury side And I mean imagine one deal making a million dollar profit net profit after everything So you know that was a real needle mover for me right now I’m building and I’m building and selling an eight million dollar home luxury home ten thousand square feet ocean you know so like I’m I kind of feel like

If I’m ever getting stuck in a rut where it’s just sort of like all transactional doing the same thing again and again, for one, I get kind of bored, and for two, I don’t really feel like I’m growing into like a better version of myself.

And so that’s been something I’ve really tried to do is pressure myself to always develop into a better investor, smarter investor, make more money, you know, all those things. And while while also trying to work less, and I haven’t figured that out totally, but I’m I try to I try to, you know, keep very balanced. I live on a farm here in Tennessee. I’m very active with my kids. So I try really hard not to overwork. Sometimes I nail it and sometimes I don’t. But you know, that’s my vision is is create this really amazing lifestyle.

Mike Hambright (06:46)
Hahaha

Jerry Norton (07:02)
be able to provide a lot of value, teach. I love teaching, I love educating, have a thriving YouTube channel. We have over 500,000 subscribers. Most people know me from that. ⁓ And have a lot of fun and do deals and have fun and help people and just try to live the best version of me I can.

Mike Hambright (07:21)
Yeah,

that’s great. I think it’s a little bit of a myth that everybody’s different, but I think some folks, and I’m like you, I don’t really want to retire and do nothing. I just want to spend more time doing the stuff that I want to do, right?

And that includes trying new stuff, like stuff you’ve never done before. Because once you get a few things kind of locked in and once you’re not worried about paying the bills anymore, now you’re kind of able to dabble in other things and see if, you know, it’s like, think of my wife, my wife has a ton of hobbies. They’re not business. She’s like got bonsai. She’s really into gardening. She loves photography. She does a bunch of stuff. The real estate’s allowed her to do that. My hobbies are not those, but like,

other things like, I’m gonna start a new business that does this, or I’m gonna try to JV on that, or I’ll just like find other, they’re almost like business hobbies, but it’s because I have the freedom to kind of to go test those things. I know you’re the same way, right?

Jerry Norton (08:13)
Yeah, mean, we launched, I have two different softwares. I have a little CRM software called Flipster for wholesalers and flippers. Really cool software, launched that in 2014. Two years ago, we launched a seller data software called PropWire. It’s a free software. We now have some memberships that are really cool. you know, like, I’m not a software guy, but I saw a need for that solution and, you know, built the right team, got the right engineers and, you know,

I always want to be that person. want to be the one that’s like providing solutions to the problems that emerge. And I think that’s a smart way to look at the business is, you know, always think if you want to make more money, solve more problems or bigger problems and whatever you’re doing, if you can think about it that way, you’re that you’re always finding the right solution to the problems that emerge, then you’re always going to be relevant and you’re always going to make money and you’re always going to be valuable in the market.

Mike Hambright (09:07)
Yeah.

Yeah, exactly. And when you touch as many people as you do, like you know what all the problems are out there. And there’s some stuff you probably gravitate more than others. Like, I think I could figure that solution out, right?

Jerry Norton (09:19)
Yeah, I mean, some of them feel daunting

and a little overwhelming and like maybe I’m biting off more than I can chew. You know, maybe there is not really, maybe there’s not a solution to this problem. but yeah, I mean, that’s if you think about like the biggest things that the biggest breakthroughs in in our world are somebody crazy enough to think they could do it. And ⁓

Mike Hambright (09:24)
I’m

Yeah, yeah, for sure.

Well, hey, let’s jump into the future of wholesaling. So let’s start with kind of regulation. You’ve been covering this kind of more than anybody and there’s obviously been a ton of changes. I think we all know there’s a ton of changes coming. So let’s just, let’s talk about kind of, you know, what you’re seeing right now and what your, I guess, kind of thoughts are going forward on regulation.

Jerry Norton (09:44)
Yeah.

Well,

first of all, like if you have your head in the sand, you gotta get, you gotta wake up. And the wake up call is that they’re coming for wholesaling and they’re not gonna stop. And as more regulation comes out, we’re seeing that it’s more aggressive. And so like you have to understand the narrative and the big picture.

At least understand the big picture because if you understand the big picture it can help you know where things are heading and so you can be preemptive about it and that’s the thing like the big thing and the big reason why I want to talk about it is I’m kind of telling everybody look the writings on the wall. It’s clear what they’re trying to do.

And if you don’t and if you wait, then you’re going to become obsolete and you’re going to be behind the ball. You might even go out of business because you’re not adapting quick enough to what’s happening. And I think when it comes to like the future of wholesaling, regulation is the driving force. There are some other ones for sure. But like AI and technology is one of them. We’ll talk about it. But like regulation is the driving force because that’s forcing us to do things differently. And like ⁓

Mike Hambright (11:05)
Right.

Jerry Norton (11:07)
If you’re at all operating in the gray and some of it is naive, like a lot of people are operating in the gray area unintentionally and with a lot of, they just don’t know. You gotta clean that up right now and you gotta draw a line in the sand and you gotta stay clear away from the middle area because what’s happening is they’re grabbing onto that and they’re using that as case study to drive forward some of this unnecessary regulation.

Mike Hambright (11:35)
Yeah, yeah, yeah.

Jerry Norton (11:35)
And you know,

like I talk a lot about this, like you really need to step up transparency and all that we’re doing is with wholesaling. Like you cannot not explain clearly to sellers what you’re doing with wholesaling. Like it’s the biggest thing that they have a problem. One of the biggest things that they have a problem with licensing is another big thing. Like a lot of wholesalers are avoiding licensure. I get it. You don’t want someone overseeing you, but that’s one of the big things they’re forcing.

Mike Hambright (11:50)
Yeah.

Jerry Norton (12:04)
And just really understanding equitable interests, how it works. And the biggest thing of all, think, Mike, is you’re going to have to become capitalized as a wholesaler.

And I know that’s one of the most attractive things about wholesaling is we’re not buying the properties. We don’t have to own them. Take on the risk and the liability of ownership. But that’s going to be the number one game changer that separates the players in the industry from the novices is the legit players in wholesale real estate have the ability to buy the properties. Still at a discount. You’re still not rehabbing if you don’t want to, but you’re buying and then reselling.

Mike Hambright (12:17)
Right.

Yeah.

Yep, yep. I was one of the first, I think I was one of the first people to really kind of lean into wholesaling, like literally like 2009. I mean, we assigned a bunch of properties and it wasn’t, back then it wasn’t for regulation. It wasn’t for any reason other than just like, I hate, I hate trying to tell a seller we need access to it with my contractors and all the crap that kind of comes with that. like, I don’t like to say it because it’s not really true. And I don’t like all the crap. So I was like, I’ll just take it down.

Jerry Norton (12:44)
And that’s going to be the biggest game changer.

Mm-hmm.

Mike Hambright (13:14)
And once you’ve taken it down, it’s like, well, why not just listen on the MLS? Because you’ll get more for it than trying to sell it to another wholesaler, right? And so ⁓ I leaned hard into that and made, and the truth is I made a lot more money. And so I think all the stuff we’re going to talk about today from regulation, AI, all these things, if you get out in front of this thing, ⁓ there’s more opportunity for you. There’s a silver lining here. It’s the people that wait till it’s too late, then you’re screwed, probably, right?

Jerry Norton (13:39)
Well,

think about it. mean, when you wholesale, you have to create a lot of contingency in your offer in the event that you can’t find a buyer. So what do we see? We see wholesalers with low earnest money. They have inspection contingencies. You you keep a pretty loose contract when you’re wholesaling.

Mike Hambright (13:46)
Right.

Jerry Norton (13:58)
so that you can if you can’t find your buyer, don’t you know, you don’t have the ability to buy it. So you got to be able to get out of it. And so by nature of what wholesaling is, if you actually can perform and close and take title and buy the dang thing, then it puts you in a much different position with sellers because now you can say, look, I’ll go hard on my earnest money. I’ll put substantial earnest money. I’m a real buyer. I’ll stand behind my offer.

And now all of a sudden, your offer is way better. You can close faster because you got your head around the deal. You like the number. You can put down big earnest money. You can waive contingencies and you can be the buyer. And we get phenomenal deals when we can be much more aggressive in the terms of our offer because we’re buying.

Mike Hambright (14:43)
For sure, yeah, yeah.

Jerry Norton (14:43)
And we can throw,

I hate to say it this way, Mike, but we can throw on throw wholesalers under the bus. Meaning we can say, Look, I understand you’ve got some other offers there. Let’s look at those. Let me show you my offer side by side to this other wholesalers offer, who by the way, is virtual and doesn’t even live here. I’m looking you in the eyeballs at the kitchen table because we do that too, you know. And so then all of sudden, my trust, my authority, my confidence and performance goes way up

and I’m getting way better deals. Not only am getting better deals, but because I actually buy it and like you just said, I go on market with it. Now I have maximum exposure. I’m not limited to a cash buyer list or you know, an investor group on Facebook or a software to find my buyer. I’m hitting the entire market. So I get a premium on the resale and now I’m making two to four times more on that deal than I ever would have doing an assignment of contract.

Mike Hambright (15:41)
Yeah, for sure. what a lot of smaller wholesalers today, if they’re doing, and I’ll say that a smaller wholesaler is somebody doing two or three deals a month or less, which there’s a lot doing way less than that. like. ⁓

when you put it out there and somebody goes around you or you put it out there and somebody, you know, gets a higher offer. There’s like, there’s so many, there’s so many holes in your boat that losing even like five or six deals a year is a dramatic profit difference from what you end up with at the end of the year, right? I mean, you’re playing in an area where you’re just covering your costs and you have a high paid job, but it’s not really a business yet until you can scale up beyond that. And one of ways to scale up is just have less deals fall

through because you’ve left all these like, you know, exits open because you’re trying to protect yourself from the downside. But you shifted all that risk to the seller and inevitably, you know, it’s more risky for you because a bunch of deals are going to fall through.

Jerry Norton (16:32)
Well, yeah, I mean…

I mean, we shoot in my wholesale businesses, we shoot for a 75 % contract to close ratio, which is really good. Most wholesalers, I think are at 50 % and I think a lot of wholesalers are at 25%, meaning one in four contracts you get to the finish line. That’s terrible.

Mike Hambright (16:57)
That’s crazy, yeah, yeah. Sure.

Jerry Norton (16:58)
Now some of that’s out of your control because there’s title issues or something like that.

But a lot of that is because you over contract, you can’t keep that seller management in place, your buyers go around you, it’s just all the complexity of wholesaling and assignment. when you can perform, you can be much more aggressive in how you contract those deals.

Mike Hambright (17:24)
Yeah. And the regulation too is, know, a lot of is the transparency and things you talked about. A lot of it too is that the traditional realtor market has been just hammered over the last few years. So they want to find ways, you know, the large brokers want to find ways that they can make fees on wholesaler transactions too. And so they’re going to push that whole, got to be, you got to be licensed thing even harder. Yeah.

Jerry Norton (17:48)
They are and they are I mean most

almost all of the regulation that’s been passed and you know I keep a free report guys if you go to wholesale regulations.com you can download that but I I outline every state summarize the laws what you can and can’t do so if you’re if you’re if you’re like wow what’s going on you know you could check that report out but like.

Almost all of them mandate licensing in some form or another, either to market contracts or to even just do the assignment in and of itself. There’s several states like that. And… ⁓

you know, getting that license while it has nothing to do with wholesaling, it’s a requirement that will allow you to still do a lot of wholesale transactions. But again, the bigger picture is they’re trying to stop it altogether. So when that day comes and there’s some aggressive states, there’s some aggressive bills out there right now that are in that moving in that direction. Like we don’t want it at all. And what you have to understand, guys, is everyone’s like, we’ll double close. That was the old way to get around. It was all just double close. Well, maybe. But you think they’re stupid. They’re going to close that

loophole too. They do not want you doing it and so what they’re attacking

Mike Hambright (18:50)
Yeah, some states already have.

I don’t remember what it is. Maybe you know, but in Pennsylvania, like you have to hold it for a certain period of time before you can resell it.

Jerry Norton (18:59)
It’s not, it’s

not in Pennsylvania. It’s not a seasoning thing. What it is, is it’s the seller can back out of contracts. That’s what they did. So in Pennsylvania, also in Washington state, what can happen there is your contract is worthless because the law gives the seller now the right to cancel contracts if you’re wholesaling. So like, you know, how do you do, how do you do a legit operation where the seller can cancel for any reason? You know, like it, what’s the point of a contract now?

Mike Hambright (19:27)
Right. Yep, yep.

Jerry Norton (19:28)
So things like that are making

it extremely difficult in some of these markets. So like, how do you pivot? Well, you know, the easiest way to pivot is to stop wholesaling and buy it. Once you buy it and you perform on the contract, none of this applies anymore. You know, yeah.

Mike Hambright (19:42)
Right. Let’s talk about AI. So ⁓

the impact that you see AI having on wholesaling.

Jerry Norton (19:49)
Well, I think there’s one massive impact that it’s having and it’s going to have, and that’s the way that sellers are going to do intent-based search.

So like we can generate lists and we can cold call and we can outbound marketing. But right now the number one method to wholesale, the highest impact wholesaling is inbound marketing. And that’s going to be PPC, which is Google ads. That could be direct mail. You know, that’s going to be your PPL, which is a relatively new marketing method where agencies do the marketing, generate the lead and you buy it without having to do all the preliminary work. But

These inbound marketing channels, they’re relying on Google where a seller will go on Google and they’re gonna type in, sell my house fast for cash in Oklahoma City. And now Google ads are gonna show up on page one and hopefully they click, they fill out the form and you get that lead. Now.

where the massive change is gonna be happening and we’re seeing this happen today is the more of these users switch from Google to chat GPT, then the more it goes from a Google ad to basically SEO because like I needed, did a, I’ve got a ⁓ buyer that I’m suing in Montana on a transaction. What they did, this is a million dollar property.

And on the last day, ready to close, they back out and they try to claim financing, which is not true because the lender was ready to close. And now I’m going to have to sell it for less. I missed the summer season. It’s a lake property, all these things. Anyway, I go on to chat GPT, not Google. And I tell chat GPT, give me the top five lawyers in this area that specialize in this type of thing. And it gave me a search. Now, where did it generate that search of five lawyers?

That’s SEO, who’s got the biggest presence in that niche that I’m looking for. So when a seller goes to chat GPT instead of Google, who’s gonna get recommended by chat GPT? It’s gonna be the people with a local presence that are market experts that are basically driving their business model through a presence based model.

Mike Hambright (21:49)
Yeah.

Yep, I’m seeing more, see, ⁓ well, for a bunch of stuff that I do, Investor Fuel, Investor Machine, I see lead sources and I don’t look at all of them, but every lead that comes in, it gets pushed to a Slack channel. We don’t need all the details on it, but so I just look at it periodically and I’m seeing more and more that our leads are coming from ChatGPT. All right, which is cool to see, honestly.

Jerry Norton (22:30)
Yeah. I mean, right now,

I mean, you got to think about in distress real estate, know, sellers are older generally, you know, they’re, hitting, they’re mostly the boomer generation. But chat GPT is now becoming the new Google. It’s the new way to search for information.

And so the more sellers do that, the less they go to Google, the more it’s gonna be SEO driven. what, guys, if you don’t know that search engine optimization, the way Google ranks you is by your presence in the market.

So things like Google reviews, your website, testimonials, all of those things are what are gonna give you relevancy. So when chat GPT is looking for, when a seller says, me cash buyers in Tulsa, Oklahoma or whatever, are you gonna show up? What that means I think.

Mike Hambright (23:19)
Yeah, well even in

Google searches now, if you do a search for traditional search, it gives you the AI response is at the very top now, right? So even if you say the older generation is not using AI yet, well, they kind of are if they’re doing Google searches because Google has just made that first, you know, the first response is like the AI response to it.

Jerry Norton (23:28)
Yeah.

Mm-hmm. Mm-hmm. Good point.

Yeah, and that actually aligns with one of the other things that I’m talking about as far as the future of wholesaling, which is.

Moving a little bit away from the virtual model and back to the backyard model and it’s not a you and I were talking about this It’s not a virtual thing necessarily as far as much as it is an appointment thing Meaning what we’re doing now in my core markets is we go on appointments We do we do not close on the phone We make an appointment and we get in front of that seller at the kitchen table and we close in person and that has been a massive game changer for my wholesale business

business. And there’s some pros and cons of this. It’s definitely a controversial topic, but I believe in my heart of hearts that we are going to be going back to eyeball to eyeball, face to face, belly to belly is going to be a it’s going to give you the competitive advantage in the marketplace. And we are we are beating out ⁓ virtual wholesalers and we’re getting contracts at 20 30,000 lower than their offers simply because the seller now

feels trust with us. AI’s created a lot of skepticism in the marketplace. And the better AI gets, the more the skepticism’s gonna go up because you’re gonna be wondering, is this a real person I’m even talking to? I’m kinda, I don’t know. I don’t know. They’re so good now, I don’t know. You remove all the doubt when you’re looking at me.

Mike Hambright (24:51)
for sure.

Yeah, for sure. Especially with the typical person. We deal with an older person that is a little more of a look you in the eye and a handshake type person. Like they want to deal with real people. And I would say I’m the same. I…

You know, my wife got on my case last, just a few days ago, we were flying back from a trip and I just didn’t want to use the, I didn’t want to check in in the damn computer. Like I want to go up to the desk and talk to somebody. That’s gonna make some people think differently of me. I’m like, hey, I’m a little bit old school, but like, just like the relationships. By the way, I have a couple of questions that I know are gonna be hard for me to answer to somebody virtually.

Right, and so I think there’s this trust recession. I see it now. I mean, you and I both create a lot of content and I see content out there. First off, there’s a bunch of people marketing to me and guys like, you all of us that are like, create faceless videos, create all this stuff. Like you don’t even have to be present and just all this content can be created. And then I see videos of actual people or I think it’s people, but I’m like, I think that’s AI. I don’t think that’s even a real person. And I just want to deal with people, you know?

Jerry Norton (26:07)
And you

know what’s funny about it too is there’s there’s almost like an AI revolt, you know, like, if you go on social media, like you go on Facebook, if someone does an AI generated post, look at the comments. If it’s AI, and it’s obvious, there’s a call out, people are like, that’s AI, you suck. And

Mike Hambright (26:25)
Yeah. Right.

Jerry Norton (26:28)
The response from that person is like, so yeah, it’s AI, what’s your, so it’s almost like it doesn’t even matter if it’s AI. I hate, I have disdain for you because as humans, want original thought. We want original ideas. We, you know, like we’re sort of turned off by it.

I am and I think a lot of people are I think that’ll start to change if it gets more normalized. But again, distress sellers are an older generation and they are very, very skeptical of AI now. And if you can look them in the eye on an appointment, you’re going to walk out of there with a contract. I will destroy you head to head if you’re virtual and I’m appointment in a real estate, you know, in any market. I just will.

Mike Hambright (27:07)
Yeah.

I get it. Yeah, I agree. Honestly,

that’s the only way we ever bought is at the kitchen table for sure. So there’s reasons why COVID and other things kind of forced people to change. Some people didn’t want to go back. There’s some people that are virtual that want to buy in, you know, 30 states or they’re willing to go anywhere. And there’s a place for that. But it doesn’t mean that you can’t, it doesn’t mean that you can come. Maybe if you’re out in the stick somewhere in rural America and you know, there’s nobody local to buy from that person, that seller might have to deal with a virtual person. But when you’re in a bigger market,

Jerry Norton (27:30)
Yeah.

Mike Hambright (27:41)
where you have boots on the ground competition, it’s hard to compete if you are virtual and they’re not.

Jerry Norton (27:46)
Yeah,

it literally is the competitive advantage that’s going to change everything. So if you combine that with, you know, ⁓ becoming what I call a local market expert, you know, our goal is to become a local market expert in that area, know everybody have great connections, title knows you, all the buyers know you, all the investors know you, you know, you’re showing up at the meetups, you’re you’re you’re doing the work to build a real business. That’s going to pay off, you know, that’s laying the groundwork.

and putting in the effort to then start to get referral business. We get a lot of referral business in my core markets because everybody knows who we are, because we do the work to be known.

Mike Hambright (28:27)
Yep. So let’s talk about marketing. So inbound versus outbound, there’s obviously been a lot of changes there. That’s kind of changing what the future looks like for all of real estate investing, really.

Jerry Norton (28:36)
Yeah, you know, it’s really interesting because, you know, I look at the two different models, right? Outbound is gonna be cold calling for the most part. Inbound is gonna be PPC, PPL, direct mail. You know, what’s the pros and cons? Outbound is much less expensive. You know, like we have cold callers where I get a full-time cold caller overseas. They can do 40 hours a ⁓ week.

for $1,300 a month for, that’s including the data, the skip tracing, the whole thing, and the caller. You know, they’re generating one or two leads a day for me. Very inexpensive. The problem is this.

Is your assignment fees are lower because it’s because it’s outbound you’re catching people that aren’t highly motivated You know, they’re somewhere in the spectrum, but there’s a lot of follow-up. So it’s it smaller assignment fees much longer follow-up So your cash conversion cycles are four to six months or whatever Smaller assignment fees and a lot of work that follow-up is a lot of work I mean you’re following up for four to six months to close those deals So you have that over there but very inexpensive and then on this side you’ve got

inbound marketing take PPC for example example very expensive but your cash conversion cycles are 30 to 60 days your assignment fees on average or our assignment fees are are 10 to 15 thousand dollars more on average per fee on those ones because they’re high intent cash conversion cycle and way less work we don’t need nearly as many leads to do the same number of transactions so like I think

Mike Hambright (29:58)
Mm-hmm, right.

Yeah, yeah, yeah.

Jerry Norton (30:10)
As soon as somebody has a marketing budget, you should be transitioning from outbound to inbound. Your life will improve like a hundredfold when you switch from outbound to inbound marketing. It’s a complete game changer.

Mike Hambright (30:19)
for sure. Yeah.

Well, I’ve been beating that drum

for years because obviously, know, we own investor machine and we know that the return, the basically the profits are typically two to three hundred percent higher on inbound leads versus outbound. Right. And then the other problem is like a lot of real estate investors, you know, we all of our real estate investor numbers have an asterisk next to it’s like, well, you know, even though it’s cheaper, like if you if you’re like some of the folks that have a bunch of coal callers, there’s a couple of problems that happen. Like one is you

Jerry Norton (30:33)
crazy.

Mike Hambright (30:52)
people leaving all the time because they get tired of being told to f off all day like it’s a burnout job and then what happens is your lead flow goes up and down because if you only have a couple people and they both quit last week like now you have no leads and so like what is that costing you and and even if they stay you you either are you’re managing them or you have somebody else that’s managing them and like that’s an opportunity cost of your time what are you doing if you’re if you’re constantly searching for people constantly interviewing people constantly

Jerry Norton (30:59)
Mm-hmm.

Mike Hambright (31:22)
them but the average real estate investor doesn’t assign an expense to that but it’s a real expense of your time and a very high opportunity cost of your time if you’re the owner.

Jerry Norton (31:33)
Yeah, you know, and I don’t know, it’s, it’s, I’m floored at how many people in our industry don’t transition when they have the ability to transition. Like I get it. If, if you don’t have a marketing budget, you’re starting out, you’re in the first, you know, that first phase, fine. Cold call, do all the stuff, you know, do the manual work to generate leads, do, do all that stuff. I get it. But the minute you have some budget,

Mike Hambright (31:51)
Right.

Jerry Norton (32:01)
And you should be creating that budget as fast as you possibly can. The more of your assignment revenue or your wholesale revenue you can put into that budget. Once you have your process somewhat dialed in, you should be switching over to inbound marketing. There’s no faster way to scale your business than that. I I was on, I do this weekly podcast show called Wholesale Hotline with Pace Moravy, Jamil and Brent Daniels. And last night we had people calling in and we were bringing them onto the show and I was stunned.

one guy comes on and I’m like okay what are doing he’s like cold calling okay who’s doing the cold calling I am you’re cold calling okay how many deals are you doing you know I’ve done a handful of deals okay do have any marketing budget I could do three to four thousand dollars a month in marketing budget you do you have a runway six months yes and you’re cold calling like that’s six dollar an hour work you have some marketing budget what why are you still doing the thing you did to get your first deal to get your tenth deal

Mike Hambright (32:50)
Yeah.

Jerry Norton (33:00)
Like, why are you doing that? And it’s like, I’m afraid to spend the money. Well, I mean, like, you’re gonna still be cold calling a year from now doing a couple deals if you don’t transition.

Mike Hambright (33:00)
Right.

Yeah, yeah.

Yep. Yep. It’s the new age bandit sign. Like when you and I first started, ton of people were doing bandit signs, right? And then, you know, after I got into coaching and teaching other people, was like, look, anything that has the word bandit in it that you have to do under the cover of darkness, like, is it, is it sustainable? It’s not a sustainable practice. And it’s the same thing for cold calling and texting. mean, not only is there a lot of regulation around it, it’s just, it’s not sustainable, especially if you’re doing it all right.

Jerry Norton (33:31)
Yeah.

Yeah,

and if you do, it’s just gonna be a very time intensive model, you know, is the challenge with it. You know, so like, and what’s cool too is like with the emergence in the last couple years with PPL, Pay Per Lead,

Mike Hambright (33:44)
Right. Yeah.

Jerry Norton (33:53)
I mean, some of these providers now are really catering to the newer wholesaler and the low budget wholesalers. Like one of the agencies, I speed the lead. We do quite a bit with them. They have some really cool programs where you pay 500 bucks. They’re going to credit you another 500 bucks. You have a thousand dollar credit on their account. They have these, they call them coupon leads that are like $29. Now they’re not exclusive. Other people, you know, they might sell them to four people, like,

If you can get a shot at a phone call with a seller who’s identified as wanting to sell for 29 bucks, dude, like that was never available just a few short years ago and now that kind of thing is available. like, why not buy those even if you’re new?

Mike Hambright (34:38)
Yeah,

yeah, yeah. Jerry, there’s no way we could talk about all this today. You put out a lot of content too. If folks wanted to connect with you or learn more about you, like where can they go?

Jerry Norton (34:48)
Thank

I mean, I’m really active on the YouTube channel. That’s where I put most of my energy into content. I do, you know, three, four videos a week, usually consistently been doing that for years and years. I cover every topic imaginable. Like there isn’t a single question you might have that I couldn’t reference five videos about, you know what I mean? And like I try to, I try to create playlists about all this. So if you go on to flipping mastery on YouTube, search on those different playlists or just type in the search on YouTube, Jerry Norton, the top.

you want and I’ve got lots of content around that. try to personally actively participate in the comments. I try my hardest to answer questions there too and you know so that’s that’s probably the number one place you know I’m on all the other socials but like that’s my that’s where I put all my energy is on YouTube. Yeah.

Mike Hambright (35:36)
Yeah, that’s the place to go. Cool. We’ll

add a link down below. So thanks for spending some time with us today. Good to see you, buddy. Sorry, it’s been I mean, you and I have talked since then, but I guess 13 years between podcasts. Maybe we’ll have to do another one in like six or something. It’s cut in half. Yeah. Cool. Always good to see you. So everybody, thanks for joining us today. I there’s a lot of things going on, as I mentioned earlier. ⁓ Lots of changes are going to happen if you’re going to like Jason, you’re going to get. ⁓

Jerry Norton (35:41)
It was awesome. Yeah, I love this topic and yeah, appreciate you.

Yeah, let’s do it sooner. Let’s do it sooner.

Mike Hambright (36:02)
left in the dirt if your head is in the sand. But if you’re proactive, there’s a silver lining here. There’s a way to improve your profitability, improve your business, make it more stable by getting out in front of these things. So some of it is just being aware of what’s going on. Some of it is getting yourself around the right people that are talking about this stuff all the time because collectively we’re all better, right? That’s one of the reasons that…

Jerry Norton (36:25)
We’re gonna see

a disparity between the top players and the newbies. The middle ground’s gonna spread even more. So like if you wanna merge into the best, you gotta play the game at a different level now.

Mike Hambright (36:37)
Yep, essentially the rich will get richer and the poor will get poorer, right? It’s the same thing in the real estate space.

Jerry Norton (36:40)
Yeah, because the regulation, all the regulation

does is it, and all of this is it creates friction for the new person, makes it harder for the new person. And then the players just adapt quickly and they gobble up all that more market share.

Mike Hambright (36:51)
Right?

Yep. Yep. Absolutely. So appreciate you guys for joining us. Hope you got some good insights from today. We’ll see you next time.

Jerry Norton (36:56)
Yeah.

Thank you.