569: Funding Missions Through Virtual Flipping

SHOW NOTES FOR EPISODE 569: FUNDING MISSIONS THROUGH VIRTUAL FLIPPING

Living a life of service can be eternally rewarding but it can also have its earthly challenges.  In today’s podcast, missionary to India Josh Howard shares how he was looking for a way to support his family while serving in the mission field and ended up creating a booming virtual real estate business that far surpassed his greatest expectations!

What You Will Learn

• How to generate a six-figure-a-month income in less than one year, with only a computer and a smartphone, and while working a full-time job!
• A great way to fund non-profits and ministry-related activities
• How to flip properties from anywhere in the world without ever visiting the properties
• What virtual wholesaling and flipping is and how it works
• The secret to success: knowing how to systematize, scale and free yourself from the operations of your business
• How to build a team with virtual assistants and local talent
• Taking your business model to share with others
• The value of partnerships and good mentors

About Our Guest

Josh Howard

Josh Howard has been living in India since 2008 where he has the role of Director of Leadership Training and Multiplication with Central India Christian Mission. (www.indiamission.org)  He is the co-author of two books, “Christian Extremism: A Life Worth Dying For” and “Igniting Movements in Dark Places”.  With a vision to replace his non-profit income so that more money can go back into the mission, he and his brother-in-law started Ignite Investment Group in August of 2020 to invest into real estate.  In their first year, they closed on over 40 properties.  In October of 2021, they had their first 6 figure month as a company.  Other than God’s grace through Jesus, Josh is most thankful for his wife Lashi and his 3 children: Josiah, Jeremiah, and Zara.

More About Josh

• Josh has been serving as a missionary in India for 13 1/2 years
• Since he was young, Josh always felt God was calling him into ministry but he never really knew what or where it would be
• India was not even on his radar
• He initially thought he would become a pastor in a church in America
• But, when he went to college, however, that’s when his eyes opened up to the nations of the world
• He got an internship, while in college, to be a photojournalist and travel around the world during a 3 month time period to document what various missions were doing around the world
• He was a young single guy at the time and the opportunity seemed ideal
• He prayed that God would show him where he wanted him to serve
• He started to look at places where the needs seemed the strongest
• This ultimately lead him to India
• When he stepped off the plane in New Delhi, he knew that was the place
• He called his mother that night saying, “I think this is the place God wants me!”
• Once there, he traveled to Dimo, India and, upon arrival, he went into a church and sat him next to a beautiful Indian girl who eventually became his wife
• That beautiful Indian woman’s name was Lashi
  • Lashi had started a children’s home when she was only 20 years old
  • Today, Lashi and Josh have been married 13 years and have two beautiful kids
  • 40 years ago, Lashi’s parents started the actual organization that Josh now works with in India
• Josh knew that God brought all this together
• Josh’s daily job at the mission is raising up and training up church planters
• The organization that Josh works with in India (CCIM) has thousands of employees and is involved in many local activities
  • Orphan care
  • Children’s ministry
  • Emergency relief
  • Feeding programs
  • Schools/education
  • College scholarships
  • Medical care
  • Hospital
  • Nursing college

Exploring Funding Ideas

• Josh was talking with his brother-in-law Greg (who lives in Colorado) and who also runs a non-profit that is focused on India
• They were talking about how they would like to generate funds from a business so that their families would not have to depend on nonprofit organizations and that more funds could go back into the activities of the nonprofits
• In the Bible, the Apostle Paul made tents to support himself and supplement his ministry activities
• This way they would have ample funds to cover their families’ needs (i.e. kids’ college, retirement, etc.), and they could help other mission work they might want to support
• Greg and Josh talked about a ton of ideas (Amazon online business, etc.) but nothing really stuck
• About a year and a half ago, Josh was talking to a good friend of his named Chris (who is a pastor in Texas)
• Josh shared with Pastor Chris what Greg and he were talking about – starting some sort of business
• Pastor Chris asked Josh if he ever heard of flipping houses, wholesaling, etc.
• Josh was familiar with flipping as buying houses, fixing them up and selling them
• But Pastor Chris said, “No.  I’m talking about just buying them low and selling them at a higher price.”
• It just so happened that Pastor Chris had a thriving real estate business doing just that and that the business totally takes care of his family (and many staff from his church) so that they don’t have to depend on church funds

Launching a Virtual Real Estate Business

• Pastor Chris talked Josh through exactly what he was doing with real estate
• Josh and Greg decided to give it a shot – virtually
• They started wholesaling real estate virtually in August of 2020
• It is unbelievable what happened
• It has revolutionized their lives
• It has given them so much freedom and a focus and a vision for the future
• It was exactly what they had been praying for and hoping it would be

How it Works

• Josh has a full-time job with the mission, leaving very little free time
• He said he could never done the business without the help of Pastor Chris
• Pastor Chris only works 2-3 hours a week on his business, yet they are doing a large volume of deals
• Josh and his brother-in-law Greg spent considerable time talking and trying to see how this business could work with their minimal involvement
• They knew that, in the beginning, it would take a lot of time to set-up infrastructure and systems
• Their goal was, once the business was set up, to only work 5-10 hours a week to generate the deals they would need
• They knew that they would have to aggressively market to locate distressed home owners
  • Homes that need to be sold at a discount or very rapidly
  • The owner does not have the option to get a real estate agent to sell
• Once they contact the distressed owner, they get the property “under contract”
• Then, you try to get the contract to a buyer who is looking for a good discount
  • They will usually pay with cash at a higher amount than you have it under contract for
• With traditional wholesaling, you “assign” the original contract to the end-buyer/investor but Josh actually does a “double close”
  • He actually closes on the property resells the property THE SAME DAY to the investor
  • He just finds it a lot cleaner and easier that way
  • He has closed many deals almost exclusively through text messages
• They are not fixing or rehabbing the homes
• These are “as is” cash transactions
• The buyer can do a walk-through with a contractor but there are no formal inspections
• They want to make it as easy as possible for the sellers
• They are not listing the homes on the MLS
• They are literally just trying to find great cash deals on properties and then find cash investors who are willing to pay more than what they paid for the properties
• His profit Josh and Greg make is the difference between what he gets the home for from the seller and what the investor/buyer is willing to pay
  • For example, if he gets a property under contract for $60K, he sells it to his investor friends for $70K and he makes $10K
  • They average $10,000 per deal

The Marketing Challenge

• To get good seller leads, you need to do quite a bit of marketing AND you need to be available when potential sellers respond
• But he knew he couldn’t take the traditional “inbound leads” (usually calls coming in to an 800 line from interested sellers) because he is in India
• He couldn’t receive calls at 3am in India for offers on properties
• He knew that the marketing had to be on Josh and Greg’s time and schedule
• First, they found a market that would provide the returns they sought
  • They identified Indianapolis
• So, then, they decided to start text messaging sellers in Indy and at a time that worked for them
  • So Josh was literally text messaging potential buyers at 10-11pm in India, which is morning in the U.S. telling prospects “Hey!  We are really interested in your property.  Can we make you an offer?”
  • It was very crazy
• They have also done cold calling as well
  • However, out of the 46 homes they purchased the first year, on 2 came from cold calling
• The very first marketing list they got was an “absentee, high equity” owner list
  • These are people who don’t live on the property
  • They may very well be landlords
  • They have enough equity in the property that they could sell it at a discount if they would like to
• They started test marketing at the end of August 2020 and they had their first deal closed by the end of September (on his wife’s birthday!)
• They quickly found out that you CAN flip homes in the U.S. from India

Refining The Process

• He wasn’t sure if it would work
• Next, they looked at what they had done and asked, “How can we do this in a simple, reproducible way so that we can do it on our own time — when we have time?
• Each night he would keep testing it out, sending out texts, trying to get people interested, getting on the phone with sellers, talking with them, trying to negotiate price and get the properties under contract
• They used BatchLeads.io for their mass text leads
  • You create the templates
  • The list merges with the templates
  • They were sending 100-200 texts per night
• Josh and Greg decided early on that it would be a 50/50 business split
  • Expenses were a 50/50 split
  • Josh took care of all acquisitions
    • Acquiring properties and contracts
  • Greg handled all dispositions
    • Building their buyers list
    • Once a property was under contract, working with the investors to negotiate a price to sell the property to the investor
• Once you get your market down and fully understand it, it then, just becomes a numbers game
  • If you send out X texts (or marketing pieces), you will receive X leads
  • And depending on your close ratio, then you’ll know how many deals you’ll close
  • If they scale, for example, they know they can close 10 deals if they do X amount of marketing, so to double the number of deals, they will need to double the amount of marketing
• In their first year, they grossed $240,000 with an average deal size of $6,000
• They also ended up buying and holding 8 houses
  • When they find a really good deal, they try to hold on to it
  • They will rent these houses out and generate monthly cash flow
• The got a silent investor

Building a Team

• In the beginning, it was just Josh and Greg
• But as they continued to market and buy and sell properties, they knew they would need more people
• So, they placed an ad on Craig’sList in Indianapolis for  a “property runner” to go and take pictures of properties
  • This person would go and take pictures of properties for Josh and Greg
  • Within 24 hours, they received 15 hits on the ad
  • They interviewed the people
  • All they needed was a Smartphone and the time
  • The deal was:
    • Once they got the property under contract, the runner would go to the property, take stills and videos of the inside and outside of the property
  • If, after they saw the pictures, they could tell the seller misrepresented the property, they would renegotiate if needed but that was rare
• Their next hire was an acquisition manager, which they hired near the end of last year (they currently have 3 – 2 in Indy and one is virtual)
  • He runs after new leads
  • Goes and visits with sellers
  • Negotiates price
  • Helps with property from contract to close
  • Coordinates with property inspections, investor walk-throughs
  • He is commission only
• They also have a leads manager VA from a great VA supplier called Rocket Station
• They have added VAs (virtual assistants) to do some of the texting (this helped free up Josh’s time quite a bit) – They now have 3 VAs
• They have an admin VA that handles the CRM
• They also have Realtor contacts in Indy that will do buyer walk-throughs for a reasonable fee
• However, they are in the process of switching all of their marketing over to a company called GoForClose.com (see episode 553 with Josh Miller)
• Currently, Josh and Greg have been freed up to looking at scaling, operating efficiencies, growing the business and addressing problems

Managing the Team

• The VAs are all paid by the hour
• The VAs who are texting can be tracked on their text software platform by the number of texts they do (which Josh gets copies of)
• For the Marketing, it is not a big deal that they keep certain hours as long as it is within the TCPA regulations of “contact hours” (You can’t text before 8am and after 8:30pm)
• They just need to hit a certain number of KPIs (key performance indicators) each day
  • A KPI, for example, is a certain number of text messages that needs to be sent out each day to reach their minimum leads generation numbers
• His Admin VA is a full-time employee (40 hours per week)
  • He has a ton of tasks that he needs to do each week
  • As long as he gets his tasks done, Josh is happy – Greg oversees the Admin VA and Leads Manager VA

Biggest Mistake(s)

• He’s had lots of mistakes since he started
• It’s Ok, though, because you just need to learn to “fail forward”
  • Just pick yourself up and take another step forward
  • Take massive intentional action every single week, just moving the ball down the field
• Some of his biggest mistakes:
  • For the first several months, they didn’t track anything (i.e. KPIs)
    • How many texts every month…
    • How many texts generate how many leads/deals…
    • He didn’t know how much money they were spending
    • He had never owned a business before
    • They would have scaled faster and easier if they would have tracked KPIs from the beginning
    • It would have saved money too
  • They were afraid to get outside help
    • There are some great coaches, mentors out there
    • There are also some that aren’t so great too, so be wary
    • Once they did find people who were great at the stuff that they were not great at, their business began to double and triple over
      • For example, they found people who were really good at CRMs, systematizing things, operations and were not sure if they should spend money on that
        • They hired them and it skyrocketed their business forward
        • His coaches were Joe McCall and Gavin Timms
      • Then, a few months ago, they found REI Game Changers that was great at scaling companies their size
        • They hired them
        • They hit their first 6 figure MONTH as a company
      • Josh highly recommends that you find a coach, mentor who can get you through the process
      • You could literally 10X or 20X your investment if you hire the right people

Biggest Success

• We took specific measures to lift the burden off of us and start delegating to employees, VAs etc. to free us up to work ON the business, not IN the business
• In addition, we connected with mentors and coaches who helped us to set up systems, automate and better scale the business for growth
• In the beginning, he also went through some of the courses at Wholesaling Inc. that helped him get started
  • He said their courses were invaluable
  • Gave step-by-step guidance on how to get the business off the ground
• Connecting early with the right people to direct you and hiring the right people early can make a world of difference

Advice for Old Dawgs Looking at Real Estate Investing to Help Them in Their Retirement Years

• Anyone can do this business if they put their minds to it
• The initial investment into this business is so much less than most other businesses you might want to get into
• You can start wholesaling with very little
• But if you have a little nest egg you can draw from, he would highly recommend a dual-approach
  • Find discounted off-market properties, perhaps from a wholesaler
    • When you buy those properties, you’ll have instant equity
    • You can invest in those properties as fix ‘n flips or buy ‘n hold rentals
    • From those properties you’ll generate considerable cash and cash flow
    • I would stay away from on-market properties because, usually, you’re not going to get a good deal

Current Business

• Their original goal was to just replace their nonprofit income
• But now that they have seen how amazing the business really is – rapidly growing and scaling – they’ve moved to full-scale
• They’re growing their time, outsourcing marketing
• They’re trying to get everything in-line to see a million dollars in revenue (gross profit) in 2022
• Now, they are now saying, “How can we take our model to help other people in ministry to come off of support so they can be free to do what they’re called to freely do
  • They are actually working with a friend to create a separate company that will help others to do this

Rap-It-Up

• Favorite real estate book: If You Can’t Wholesale After This I Have Nothing for You by Todd M. Fleming
• Favorite business book:  Rhinoceros Success by Scott Alexander and Traction by Gino Wickman
• Most valuable web site for success (other than your own): Wholesaling Inc.
• Favorite app: PropStream
• Favorite quote: “Are the things you’re living for worth Christ dying for.” By Leonard Ravenhill
• If you lost everything – all your assets – and had to start all over, knowing what you already know, and you only had $1,000, what would you do to re-launch your real estate investing business? I would put the entire $1,000 into text messaging and find my next deal to boost my business start. We literally started with a $500 a month marketing budget.  After the first month, the money we made in the first month shot us forward to grow the business from there.

How to Reach Josh

• Email: Josh@IgniteInvestmentGroup.com

IF YOU LIKED THIS PODCAST, we would love if you would go to iTunes, Stitcher, GooglePlay, iHeartRADIO and Spotify and Subscribe, Rate & Review our podcast.  This will greatly help in sharing this podcast with others seeking to learn real estate investing as a means to achieve a successful retirement.

Check out our other podcasts at olddawgsreinetwork.com.

Get a FREE copy of our 3-Minute Rental Property Analyzer at olddawgsreinetwork.com