Video Marketing Success Strategies: How to Get Maximum Mileage Out Of A Single Testimonial

[00:00:00] Welcome everybody to the weekly probate mastery group coaching call. I don’t really have anything prepared for this week. These conversations tend to pick up their own theme and we roll with it and had some really productive calls the last few.
So don’t be shy. Step in:
Eric Stark, buddy. I’m sorry. I missed you. I Did not get to your side of Michigan. I’m in the UP now. Good for you. You swing back down this way, stop on in, man. I’m not jealous. and I did get your message and I will give you a call to discuss that. Awesome. Thank you. What’d you work on this week?
I’m just going through and finishing up some branding, getting revisions and perfect edits on the book so we can start mailing those to the people that are in the hot areas where we want to buy more properties. We’re just going to start mailing a copy of the book, right to people. Just trying to perfect. Some more processes, get the website. And really just trying to find out how all of the colleagues are really picking up traction. We’re only connecting to about 15 to 18% of the people and we’re just getting shot down at every angle.
Like we’ve got it covered. I think the one thing that I just have to figure out is we’ve got to find that way to become benevolently bolder with these people. It seems like we’re providing value, we’re helping clean out their house. And the next thing I know is somebody else stepped in and has bought it from underneath us.
When they’ve been adamant about saying, we don’t really know what we’re doing yet. So I’m just trying to find that perfect line to walk that is not pressing too hard, but being bold enough to uh, you know, to step right into that.
Have you pressed too hard? Have you found that boundary? You know, the only time I’ve really felt that I pressed your heart is when I get cussed out and they say, you know, my family just passed away and you’re over here trying to press me and, get us, to decide on something that, you know, the attorney told us, we have to wait for the four-month period for, and I think I’ve mentioned this before, and it seems like anything shy of 30 days, they think their attorney is a godsend to the situation.
But once they cross that’s the 30 to the 45-day mark. They’re like, man, this guy really isn’t doing or communicating anything to us. You’ve actually told us more than he has.

[00:01:58]You know, and then we try to push for the appointment. They’re like well, we’re still just kind of waiting. And then the next time we follow up, they’re like, yeah, we went under contract and we closed Friday.
Have you closed one of these deals with one of those people who realized the attorney, wasn’t going to do everything and eventually came and did business with you? So I haven’t closed on probate since back at the beginning of March, we’re doing really well with the driving for dollars, but the probate is really, it’s really having a hard time right now for us.
Okay. So let’s go back to the ones you found driving for dollars. Do you still have a relationship with the sellers? Would they jump on a zoom call with you? Absolutely. Yes. They love what we’ve done for them. So here’s what I want to try. I want you to get them on your calendar and do a zoom call and record everything. We’re going to edit it down to a reel but let’s get each of those sellers to come on a zoom call, talk about their experience up until the point that you’ve called.
And then after you called and consider the whole thing, B Reel we’re not gonna use it in long-form, but we want to get the whole story out there and get that laid out in B Reel. We’re going to give those to a good video editor and we’re going to have them put it into a highlight reel.
That’s two to three minutes. And every time you speak to somebody, where you are backing off and someone else’s getting to them before your next contact, following each of those conversations where you feel like you need to back off, you’re going to drop that and say, listen, I completely understand how you feel.
It’s one of the big reasons we do this because a lot of people put too much faith in the attorney thinking they’re going to deal with things outside of the scope of their responsibility. And if it’s okay with you, I’d like to send you just a quick little video from two or three families right here in Michigan that we helped so you can see how their story played out. Would that be all right? And can I get your email? And when you’re having that, phone call, drop that to as many people as you can prominently display it on your webpage, put it on your Facebook page, if you have one for the brand.
I mean, if those people would be willing to do that. let’s tell the story, right? The prospects who don’t think they need your help, need to identify with the ones who ultimately learned they did need your help. And they can either do that over a 30 to 45 day period of procrastination and frustration or maybe we can help them accelerate that in a two to three-minute video.
Absolutely. That definitely won’t be difficult for me. The other thing is taking the same concept and just putting it in writing. And you could have a follow-up letter that you dropped to people, or it could just be part of your normal direct mail sequence, where you say, here’s a story about the Joneses.
And you know, you guys heard me tell the story about Pam at the beginning of probate mastery. I’ve told that story to so many sellers, I recycle every deal that comes to a story that I use to help people be to have more social proof and help people get comfortable with me.
And the idea is to get them to identify as the main character in that story, right? The first one representative that you help, the one that’s on camera, the one that you present in the first sentence of an email that you sent you could even run this as a, you know, as a Facebook ad, you could get that highlight reel, put an overlay like a black bar above and below.
And say, families and Michigan talk about their experience going through probate or something like that, and just run it to your audience, like create a saved audience of around that as an ad. So there’s a lot of ways we can use the content. If you can get it captured, then you know, we can repurpose it in several ways.
Beautiful. Yes, I can definitely do that. I’ll put that on my list to follow up with those people this week tomorrow, actually Dan McCarthy, making any headway over there. Uh, Hi, Chad, how you doing? Yeah, I mean, I’m, I’m getting some leads to my probate mailings. I’m actually doing a little bit of work on a condo that I got through a probate mailing and we’ve got, I’ve got that sold as there wasn’t enough money in it to to buy it myself and fix it up and sell it or wholesale it, there just wasn’t enough margin there.
So I, I listed it for them and um, it was a tough situation. It was an only child who passed away. The parents were devastated. They just walked away from it. They just, went and got his diploma and walked away from it. And I kinda took care of everything for, so it was just listening to what you said to Eric I believe about, you know, of creating a highlights reel for YouTube or something, or just to show prospective clients what you can do for them because we actually did a lot of work on that condo. That’s something that I’m going to do. I think with that owner because she loves me now.
And she was really worried about working with me and, she actually said to me on the phone the other day, she said, listen, somehow I picked you through the grace of God. And I know I made the right pick because you’ve helped me so much. So I’m sure I could get her to sit down and do a, like a quick interview or just a, you know, a little sizzle reel kind of thing.
I definitely do that.

[00:06:48] I challenged Rosie with this hell it’s been a year ago. I think it was probably last summer. I’ll issue you the same challenge. If you don’t have three amazing testimonials that you’re proud to share with anyone and everyone, prospects, peers, you know, people in this group, if you don’t have those, that should be a priority.
the nice side effect of that is you’re going to get paid on three deals. But the priority is to capture the story. Most real estate professionals go out there and they’re like, oh me, I got this certification. Or I got this and look at my brand and these are the best headshots ever.
I paid like $175. Something to be aware of. Nobody gives a shit about your business; what they give a shit about is their pain going away. And if we can give them content from our business, with our brand, that helps them identify with that character in that story who ultimately is the hero who got help or you’re the hero.
They’re the recipient. But if we can get them to connect with our past clients, that’s some of the best marketing and the best currency we could ever have in our business.
So Rosie’s done a good job bringing video into her business. Eric, I think we’ll get this done.
Dan’s going to get this done. Dave Gwinn, I know you’ve got a ton of past clients. If you haven’t done this yet, man, you got to get started. But for everybody on this call, if we can get those video testimonials and go long-form, we can always clip it down and make an edited reel. But how powerful is that?
When someone comes to your website to check you out? And here’s something. So I use WordPress Jetpack on a simple landing page that I had. So in the P.S. line of my letters: it’s PS if you’re not ready to talk, we understand go to this domain to learn more. What I found is every a hundred mailers I sent would put about 60 unique web visits on that page, the day the mail hit and day one we would get 60% of people to go from a letter to a page because they were trying to learn more about me.
Who is this guy? Is he a scammer? Or if he really says he is, what can he really do for me? So imagine if you can if we’re getting that kind of response, but it’s not becoming an inbound lead. Why is that? Where are we coming up short? So imagine if that traffic lands on a page where you have those stories being told, Hey, you know, my name is Sue Jones, and I worked with Dan McCarthy about three months ago.
And I just wanted to take a moment to tell you what a shitty situation I was in and what Dan did to help us out. And immediately, they’re going to identify with that person. And they’re going to step into that role, that character role in that story. And it doesn’t mean everyone’s going to call you and do business right now, but it’s going to be so much easier to build trust.
And it’s a very big differentiator. And Rosie, I’d like to hear where you’re at in a sense it’s been about a year, but I want to issue the same challenge to everybody: get three rock-solid video testimonials that we can use in your Facebook, on your Facebook page, on your YouTube channel, on your website, on landing pages and direct mail campaigns.
Let’s get those done and create a highlight reel and use it in a lot of places because this is the work. That’s not necessarily that hard, that difficult once you’ve got the business, but it’s work that hardly anyone will do. So it’s easy to compete when you have things like this because nobody else is doing the work.

[00:10:00]But Rosie, since we had this conversation for you a year ago, tell us about your video journey and what it’s been like getting clients to do it, how you use it, what advice can you offer?
Hi. Hi everyone. I’m from Austin, Texas. And I was listening to the beginning of the call and I personally have very similar challenges where investors are reaching out and the mailer to the probate leads was a little bit heavier.
So to distinguish me from the crowd was very important. So one of the biggest successes we had is rather than just doing just a normal email campaign, whatever recordings, opportunities we did with interviews, or whatever, the good job we did in any of the properties that we helped people clean up.
We made small videos of it and we embedded them into the video campaign to all our leads. I personally actually closed a listing out of it. It was never a phone call. It was just an email exchange. She met me, it took me three months of campaigning with her and she wouldn’t take my call, but respond to emails and we listed and sold the property.
And it’s actually one of our own investors who bought it. So he’s going to be flipping it. We’ll sell it again. So as Chad was saying that if we take it through properly, then we can actually score more than one listing off it. And it was basically out of the video campaigns that I’ve been sending to people.
You just don’t have to make it perfect. Just do it. When there’s no competition as Chad is saying, anything you do is going to be great because there’s nothing to compare to. Uh, So that has been a big advantage for us.
There’s no content on probate and whatever little content we put out there, people appreciated it because it looked like all the content. Another thing I have also my challenge was that the person I’m selling probate for, their remote. You know, kids are like a five-hour drive and I’m selling their property here that they inherited from their parents.
So my way to get the video for her was very difficult – she wouldn’t get on zoom. I can sense that hesitancy in her voice. So we actually got a voice testimonial from her. So my team is actually putting like probate and the property address on it and our logo and everything. So they’re going through the editing and it’s just a voice testimonial and we will type out the voice recording at the bottom to make it video content.
Uh, You know, those little bars that show up when somebody’s talking so they’re doing something like that. I’m not my team does it? So we’ll definitely share that product on that.

[00:12:17] What are the ways you plan to use that and repurpose it? We’re actually going to put it on our Facebook.
We are going to put it on our YouTube channel. For our probate series. We have a different look for our main banner thumbnail than our other content. So when people go to our channel, they can easily locate the appropriate content. And we plan on sending it into our introduction emails. Um, So I have a template email for our realtor introduction when a lead converts, and it has a link to those testimonials in it.
And I only have one video and one half voice recording. People like, look you up. It’s easy for them to trust you when they see you. Yep. That’s it.

[00:12:54]Can you talk about that video, this video campaign you’re talking about. Can you tell us a little bit about what that is? So, um, Whenever I did the big and I started the probate group with y’all the very first assignment I think everybody was given was to interview the probate attorneys.
So I located good three probate attorneys who were willing to jump on a zoom call with us. And we recorded that interview and I had our admin team write a transcript off it, which means write a blog on it, on what we’re really talking about. I think David Pannell was the one who told me to make it small segments. And from you guys as well, Chad um, so what we went ahead and did it, come up with four-minute clips off those interviews and repurpose that content. And just blog with those little five-minute, four-minute content pieces. So I have like around 12 step campaign that kind of finishes in two to three months, two months at the max I believe. The frequency is high in the beginning, then it slows down. And after that, it’s just once a month, slow touch with them. Um, So it’s just the interview. Three attorneys, they all talk all different stuff on the same questions. So you have plenty of content and get it edited into small pieces and write blogs and just put it into any CRM that you have or.
And now you have video content as marketing. So it’s like a MailChimp or constant contact email that you send out. It’s a little bit of a blog with an embedded video. It’s like a YouTube icon. You click on it. It takes you to, yeah. Okay. And you’re sending those off to who, to people who are on your probate list.
The emails, everyone, because probate is going to take time to validate me, but some people already have worked with us, who already validated us. So I’m telling them I’m a program specialist to everyone. And I mean, most do who this is going to be surprised. I’m making the most noise to investors because guess what’s happening, Chad, if you’re okay with me sharing here’s what has happened?
Foreclosures got delayed. What do investors go after? Foreclosures have been put off every few months because of the moratorium. So what are investors doing by sitting in the investor group? This is my personal experience. This might be all speculation, but you guys can validate it for me. Investors are talking about going after divorce list going after eviction list, and guess what probate list.
So that’s why there’s more noise on the probate list. So if you can’t fight from the front door, go back on the back door and just ask investors, Hey who is the probate person you’re talking to? Who’s not willing to give you the property, let me sell it because you now get referrals from investors.
And that’s how I’m getting my business to. When you pick up a property, are you primarily selling those properties as a realtor, or are you wholesale and flipping them? I’m open to all possibilities for us for now: list it or buy it as a flip.
Okay. Sweet. Thank you. You’re welcome. Thank you, Chad thanks, Rosie.

[00:15:45] I know you had a question you had reached out to yesterday. How are you? Fine. I actually misread the time I was thinking it was one o’clock my time. So I like am in the car, driving back home. But I’m also trying to invest now and also be a real estate agent.
And I brought on two women that are actually gonna team with me. And when you were in the mastery class Chad you talked about how you evolved into that. You would bring two contracts if I remember, right. And one was a retail contract, this is what you would get, and this is what you would net if you did that, or I could buy the property for this amount, and this is what I would make on it. So you would disclose it right up front, and then you were, you would be, I dunno, if you were wholesaling or flipping it, what you know, I guess probably different things, right?
It didn’t matter what you did with it at that point. And you gave him the option. And I guess my questions are around as a realtor, how to do that ethically and also how to have partners involved in that. And what’s the fairest way to do that?
Before I answer a couple of little questions. So what is your business relationship? Are they profit-sharing? Are you paying them per deal per hour? We’re gonna, we have done a lot of research. It looks like we need to do a C Corp for each of us and then have a partnership agreement is what I’m open for suggestions, but that’s where we’ve evolved now is that I don’t think you want a C Corp, I mean, there’s…
I’m using a company called Anderson was referred to us who are also investors and they’re a whole team, they’re attorneys, tax advisors, and business advisors. And they are all investors themselves so they understand it differently.
So that’s when they suggested they might have some structure. And John, I saw your body language. If you want to pipe in please do. That doesn’t seem like I wouldn’t do it that way, but okay. Tell me how you would do it. I want to hear John Fraker tell you how he thinks it should be done. He’s the one law degree.
Thanks, Chad. Yeah, I actually like Anderson I follow their stuff and watch their blog. Yeah. That’s great information. And I get a coaching call with them so far. So yeah, I mean, I also wouldn’t rule out finding somebody closer to your you know, where you are personally to talk to you about your legal and tax stuff.
They’re really good. They’re also a fortune. If you want to use them. Like their whole legal package is really expensive. Then you throw on the tax prep work. So I’m not discouraging them. As I said, I like them a lot. I was considering doing a membership with them because for a flat amount and we get a discount because we’re part of Ren, the Wednesday networking group, and then $35 a month.
They’ve got unlimited access to their question, which we have had Lee legal shield for 30 years. And I use that all the time. It’s an awesome process where I can call. I can fill out the paperwork, they just tell me which one to fill out. I’ve done several legal things, myself doing it myself, and then been very effective.
And then they have the tax advisor part too. I just know that when I talk to attorneys in the past, if they don’t understand, invest personally themselves, even if they’re a real estate attorney, that’s problematic because there are caveats, they don’t know. Yeah, absolutely. And that’s what, that’s, why it’s still recommended finding somebody in your market who does real estate investing and works with them just for your own.
I mean, just for your deals anyway, you know, when I invest in everything, I always run stuff through a local law firm. Anyway, you’re going to need them, you know, in your arsenal, regardless of the legal stuff. I mean, as far as bringing on different partners and things like that, I mean, the number one thing I tell people is to clarify everybody’s expectations, right?
I mean, I’ll like 99% of the law is just reducing everybody’s mental understanding of what’s happening in writing. So that everybody’s on the same page. It’s just disagreements arise. But usually, the horizon is one person thinks they were promised, this person thinks they’re promised that. And then they wind up in the courts to decide, you know what everybody meant when you could just clarify that up front.
Right. And then two other ladies are. They don’t have any real estate knowledge per se, except owning their own property. So I’m coming to the table with most of the knowledge, but one of them is really good at tech and that background and the other one’s more good in the finance. And so we thought we would conquer and divide kind of thing as, as well as the duties, cause it’s overwhelming running these lists and stuff and trying to get ahold of people and putting together a so that they run and are consistent.
And I’m used to that. I do all that. I’ve done all that. I’ve been in business for 20 years now. So I have a system. Go ahead.
I want to hear your opinion, John, on the C Corp structure for a small partnership like that, it seems unnecessary and more expensive, and complicated to maintain. A-C corporation has two levels of taxation, right?
And sometimes that works in your favor. It’s probably not in a small business. If, especially if you’re wholesaling, like if you’re getting hit with earned income tax rates, it’s not going to be too favorable. Donna, you’re likely to end up paying a lot more in taxes. Yup. The main thing is when you’re dealing with someone like Anderson, you need to understand why they’re recommending it in your specific situation.
Not just overall in a seminar or YouTube video or whatever. I mean, they’re great at publishing content, probably one of the best in the industry, but no why it’s being recommended in your specific case. Right. But again, I don’t know. I don’t know what relationship you are having with these other people.
Is it per deal or is it an overall ongoing business kind of thing? Right. See, corporations can be advantageous in certain circumstances, but you need to be clear on that and they needed to tell you why they’re recommending a C Corp for you in what you’re trying to accomplish in this specific. Does that make sense?
Initially thought, I thought we would need one C court for all of us, and then we would just have an agreement underneath.
You had an LLC for every property, this is what I’ve been told by multiple people now, LLC, for each home, because you wouldn’t want one for 10 homes. After all, if one person sues you because they fell in their house and they could see you for all 10.
Right? So you want it for each one and then it basically when you sell it, it goes with it or it dissolves. Is that true or no? I mean, it is true. A lot of it is, you know, cost-benefit, right? So when I talk LLCs with my real estate investor clients, I’m in California, so that the downside of California investors is that they’re going to hit you with an $800 minimum franchise tax.
For every LLC, you have 10 flats, you have $8,000 a year minimum just for that. So that doesn’t become super popular with my clients. I’m pretty sure we don’t have that here. I don’t I don’t think anybody does outside of California. It doesn’t mean that you need an LLC for every deal.
Right? Some people do one LLC and they do separate land trusts for each, with the LLC as the beneficial interest of the trust. Right? There’s that. And then there’s also the, you know, putting two or three properties or two or three deals into one LLC. So you’re not always having to reinvent the wheel on the corporate paperwork, et cetera.
Right. It’s. So I have a lot of buys and holds. I would say the majority of my clients are buying and hold long-term and I’d say, look, if you have five single families, that’s a different risk than if you have five multi-families right. Or one master department. I have a lady who has a 150 unit apartment complex in Cincinnati.
And you know, that one gets its own firewall because obviously, the liability from that sucker is tremendous, right. Single families, not always right. I mean, always look at every deal, analyze it from all the different ways you can get sued, obviously on the flip there are, you know, different levels of liability.
So whether or not you need a separate LLC for every single possible deal that you could ever do. I don’t know. That’s expensive. And time-consuming this is something that I really want someone who knows this to do for me, to me, it’s not my area of expertise and I don’t want to figure it out.
To be honest. I want to trust somebody that is, you know, I’ve got credibility. and I can do it myself. I did my own for my real estate business. It’s not that difficult to set one up, but it’s, it is with partners.
Returns are also obnoxious. what I would recommend, I mean, and there’s obviously, I mean, you’ve paid for their time and they’ve dug into it, but generally what I would recommend for most investors at least in the beginning if you don’t already have a sizeable portfolio is just a simple LLC.
And then each of the properties, you roll into a land trust. Now, if you’re financing these sometimes banks, don’t like land trust. You can take the title as the LLC and then roll it back out into a land trust. The reason for that is predominantly anonymity. But in certain states, like in Virginia, I don’t pay transfer taxes.
If I close it into a land trust versus closing it into my LLC. So I ended up saving it’s a wash. Like I come out net positive. Because I have to pay 500 bucks to establish and record the trust, but that’s cheaper than the transfer tax. So one is cost savings too. It’s anonymity. So if somebody does come to Sue you, the plaintiff’s attorney is going to go, okay, what assets does she have?
And if they can’t find any, then you don’t have, it doesn’t make much sense to Sue you. Right? So if you like that,
[00:24:31] what I would normally recommend for most people is a simple LLC with a rock-solid operating agreement. And your shares of that LLC are held by probably another LLC. You by yourself, you are you and your spouse that way, if anything ever does break out in a partnership, you still have your personal LLC as the one in that fight.
So if you were ever sued as a partner, they would Sue your LLC. Not necessarily. You personally, now. They’re likely to show you personally, too, but what your attorney is going to argue. And I don’t know if she was acting as Donna, LLC as the part in this. So it gives you, it’s a simple structure. You solely have an LLC that one’s easy to establish.
You don’t usually need an operating agreement, unless you plan on suing yourself partnership, LLC, you need to, as John said, you guys should sit around the table and literally get everything out on the table and pay a local attorney to draft an operating agreement that, that protects each of you and actually can like clearly in black and white says, this is the intent of these people upon formation.
And then what? REIA real estate investors. I actually joined the one here, Arizona. I just joined it, but I haven’t been to a meeting yet but I did join. Yeah. That’s a great place to find attorneys who know what they’re doing in real estate investments.
Obviously, you know, never reinvent the wheel. Right. You’re not the first person to have these issues to learn from the other investors in your market, who they use. And I mean, you can really get the inside skinny on what it’s like to work with people by talking to their clients. And what do you like about it?
What do you not like about it? You know, do they understand what we’re trying to accomplish? Right. So, I Googled partnership agreements yesterday and I actually found it. That had some pretty good structure in it, but I figured it still needed to be reviewed either way by an attorney. It was, it looks like it was written by an attorney originally, but it didn’t have some caveats in it that I know it needs to have.
But it was a good start. I already told the girls both of them, we need to have an attorney actually write up our partnership agreement. So you guys are calling it an operating agreement saying would be the same thing, right?
I mean, or is there different terminology? That’s mostly the same for a partnership, LLC. It’s the terms are interchangeable. I wouldn’t use anything off the internet. I had a client who hired us to do a corporation for them and they booked the meeting and showed up two days later.
And like in between they went to legal zoom and paid them like 800 bucks.

[00:26:59] Tell me, show me how big you’re thinking in this partnership.
Show me your vision. How big is it? I personally want to own 10 properties that I own and keep like rent. I would actually like to do it in the next year, I mean, I’m getting to be at an age where I’m going to be retiring and I want to be able to, I literally had a vision.
I had a dream the other night that we went in our travel trailer cause we just got to travel trailer three years ago and we were traveling the country buying property, me and my husband. So I’m thinking big. I want it to be something we can do on the road or we could do here.
10 properties free and clear why are you going down this road with partners and how do you see that happening with two other people? Having the Chicks, the 6% equity, and the asset. My one of is my best friend is always going to looking for something as well to do, as you know, as a business that she can make money.
She understands real estate because I talk to her about it all the time. The other one I’ve known for 35 years. Okay. And she’s actually lived in California. The other one I met through the rent, the women’s real estate investment group. I met an investment network. I met her through that and we connected she’s here locally with me.
And she’s looking for an exit strategy to, get out of a daily job too. And she’s got a good business head on her. She’s a life coach. These sound like 10 99 contractors to me, not partners. I don’t know if they would see it that way. I mean, in their mind, they, what they, yeah, I see what you’re saying.
I mean, I come in, bear with me one second. So let’s say it’s 2024. The LLC has 10 houses. How do you get them to be your houses? When you bought them with partners,
you have to finance them out. You either have to give them, or you have to refile the assets. So it doesn’t serve your long-term vision. Like your vision is Donna owns 10 houses bringing a partner into that, put you further from that goal and adds lay like multiples of complexity. So what I’m proposing is that your venture with these individuals can feel like a partnership.
You can call it whatever you want. But from a legal standpoint, you have an LLC that LLC is on contract. That LLC has a contract with them as 10 99 contractors. And they and their compensation are based on profits. So they can benefit from the work that they do and get some profit, but ultimately title is only held in your name cause it’s your big vision.
Right? And it sounds like you’re bringing more to the table as far as the experience of how to build, manage that portfolio. Right? Rosie, you have, what if each one of those guys wants to own their own 10 though? I mean, how does that, can we just have an LLC account? We work together on the lists and leads in that and divide and conquer.
I mean, I guess maybe part of it too, it’s like just being really transparent. My worry is based on what I know, it seems like this is a relatively new relationship. You. But in the very beginning, you said I’m the one with all the real estate experience, but these are good gals and they have business experience.
And you started to justify that. So what I see is you already, you got some doubt in there. You’re trying you’re you already don’t know what this is. Right. But if you guys sit down as a team, the three of you, and say, okay, we want to own 10 houses each. And we realized we get 33.3, 3% of each one that way by, you know, we’re going to do this forever.
The biggest challenge with putting all this into one pot is going, you guys have to, and I’m going to say, have to, unless you want to live some legal hell in the future, you have to have the same. Like strategy and maybe meaning like somebody can’t just change their mind or decide they want to liquidate in two years, because this is a long-term plan.
You have a long-term portfolio plan. They, if they’re looking to make quick cash and change careers or put a kid through college and they need to liquidate assets, then it can completely screw up your entire financial strategy across the portfolio. And commercial lenders may not give you a partial release.
They may not let you refund, you know, some limitations come with that. If they want to own 10 houses until they die and you want to, then it might make sense, but you’ve got to make sure that you guys are on the same page. That they’re in it for the long haul. Otherwise, you could be spending a lot of money upfront to partner with people that you should have just joint ventured with to, to make some quick profits on deals.
And I’ll caution you to not feel like there’s an extreme amount of urgency to have the partnership in place, because you can underwrite these people doing some joint ventures, right? So you guys can jump into a couple of deals. You have your LLC, they have theirs, you do a joint venture agreement, and let’s try this out.
Let’s do a couple of deals together. And you know, you may even set a few, but a few tests in there to see what you can reveal about them. And okay. I would just caution you before you pay a legal firm, a lot of money to write up a very complex corporate structure. Make sure that this is it’s what serves your long, your long-term view, like your vision.
Cause if you want to hold these out, for example, like a good friend of mine, nodule he’s in controls probably 650 700 doors. He will never sell a piece of real estate. It’s just, it is not in his fabric, his dad, but years ago you don’t sell real estate. You buy real estate, you pay for it, you get it paid off and you hold it forever.
Even if the damn thing’s running on the ground, your cash flow to rebuild it. So if that’s your view, then you. People if that, that if that’s your strategy, if it’s a true long-term buyer, oh, it’s bad news to partner with somebody who’s been wholesaling. And they’re used to quick, you know, quick shots of revenue and paying high taxes on that.
It’s a whole different strategy. So make sure you guys, I hope you’ve already had a lot of those conversations of, you know, what do you why do you want to do this? What are you going to do with the money? Are you a credit partner? If, because if they’re going to be a partner in split equity, they should be willing to be a credit partner as well.
Right? Like you can borrow off of their name and they sign a personal guarantee. And like that shared risk. If they’re like there, they should be bringing a lot of benefits to the table. So it’s a big decision, big conversations, a lot of folks jumping into partnerships, taking it too lightly.
You get 20 to 30 houses on an LLC, you’ve got a lot of stress on your hands, figuring out how to get one person out, whether they want to be out or not. It can get really complicated because of your if you’re using leverage, especially because then the bank has a say in it too. Right. So just be really clear on your strategy now, all that.
Can I ask one quick question? So with you saying, doing a few deals together, that’s actually initially what I was thinking, but I was thinking, oh, everybody’s saying we need to do all this legal stuff and I don’t want to, I know I want to make sure we’re protected. Right. So how would that, what would that look like?
We just have it written on a napkin that we’re going to split everything a third or what would it look like? I mean, do you have an LLC? I have a PLLC for my real estate business. My name. I’m sorry, you’re not going to co-mingle your brokerage activity with your investment, right? Right. So I have to have another, so I haven’t done anything yet because I’ve been advised so many different directions to Sunday.
I don’t know which way to go right now. Yeah. Get an entity for yourself. Probably just a simple Arizona LLC. And I think you’re, I think your annual maintenance is like 50 bucks in Arizona, right? So you’re, it’s a single member, LLC. It’s a pass-through you’ll it’ll come through on your taxes as a schedule C and you don’t really need an operating group.
You can do that today and have a legal entity with an EIN. Go get a bank account for that, set up your checking account, and just have that ready. They should also do the same. And this is one of those tests that I was telling you about, right? If this person is a partnership. Then there, you’re going to say, all right guys, listen, there’s, there are several ways we can do this.
Each of them is it’s probably going to cost us between five and $10,000 to set up a fully structured entity that would protect us all and be a good long-term entity. If you’re working with that level of attorney, that’s probably not that far off. I mean, you can burn up five grand pretty quickly just writing an operating agreement.
So just use that as the excuse. You know, listen it’s, we’re going to have to invest a considerable amount of money just in the setup. So let’s first make sure we know exactly what structure we need. If you guys can go set up your own single-member LLCs, I’ve already set up mine. Here’s a joint venture agreement that we’ll actually use and we’ll do one for each deal.
So you signed the contract is Donna LLC and or OSI. That contract, you know, and then you have a 1 23 Walnut street, and then you guys have a joint venture agreement and you could base it on time or you can base it on property address, you know, but show them like, Hey, listen, I’m willing to split everything three ways.
I’m just not, I don’t know what to tell the attorneys to write up just yet. So let’s do a couple of deals, but you can do a simple joint venture agreement between your loans. Where do you get that should get it from my local attorney? And John gave you great advice, meet that attorney at the real estate meeting next week.
Okay. So there are lists of resources on there. Every Rhea has their list of attorneys or a mess or a message or calls some of the other realtors and get their input. Successful people, people who are where you want to be in general. I mean, I’m in complete agreement with Chad, as far as everything is not about putting people in an equity position in your county.
I tell people that like 20 plus years of advice if the person that you want to give equity to if they leave your company and your company implodes, you give them equity. Anything else? You find something else, some other way of compensating them some other way of structuring a deal, the entire corporation’s code in California.
And literally, every state is designed to protect minority shareholders. People who own less than 50%. So if you’re not great at keeping records and holding meetings and minutes and observing the minutia of the corporate code, a minority partner could use that to just hammer you in court because the entire court system is designed to protect people who can’t protect themselves in the corporate structure.
Right? So

[00:37:05] all that stuff that like you don’t really need to worry about too much in your LLC when it’s just, you become really important when you’re trying to solve that in front of it. Okay. And how much would an operating agreement typically think cost us to do so I have an idea. Do you have any idea for the three of you?
Yes. You should budget at least $5,000 because you’re going to have to address, like what happens during death? What happens during disillusion? What happens if a member wants to transfer, you know, that are new members allowed in, can they sell their shares? Do you have a right of first refusal?
Like you guys have a lot of discussions. I’ll tell you the difference. We’re just going to do a couple of deals first. Like you said. It’s like getting married before you go on a first date, right? Like, well, Can’t we just sign the marriage license. I mean, it’ll probably work. If you’re just going to do a couple of deals, it’s going to cost you 150 bucks to file an LLC. It’ll cost you maybe $200 in an attorney’s time to share a joint venture agreement.
You can probably just get that from the document library from your REIA. A lot of them actually have an attorney on retainer for the REIA that actually provides state contracts, leases, JV agreements, also wholesale purchase agreements. So you can probably just grab that from their resource center.
Kind of a test with a couple of deals. Okay. Yep. If they can’t set up their own LLC and sign the joint venture agreement and like to meet you at least, either way, it’s a pretty good first test, right? Can’t show up on time for the first date.
The marriage is probably going to suck. Right, right. But I would suggest if you can do a couple of different types of deals, so you have to go through the management discussion. Okay. Now we have this house 1, 2, 3 Walnut street.
We’re going to put 35,000 into it. Who’s going to manage it? Now you’re having real conversations. Right. And you’re going to learn a ton about these people just in these first few deals. And see if they step up and actually earn their 33%. One of the biggest mistakes you could ever make in a partnership is just arbitrarily saying, okay 33 for me, 33 for you, 33 for you.
You’ve got to look at what does being done, who is doing that work? My strong suggestion here is to find a way to work with these folks as 1099 employees or joint venture partners because it’s expensive to set up a good partnership structure and it’s really damn expensive to get yourself out of one that was poorly structured.
So one of them, for instance, I think has more um, available finances. So maybe let them be a private lender for the deals and make the 10 to 12% or something like that. You can make them, they can be a joint venture partner and the lender, right? There are two agreements there. They’re a profit share on the joint venture because you’re wanting to, you’re wanting to build Goodwill with them, right.
Hey, listen, I think I want to be your business partner. So here’s your joint venture agreement. And by the way, if you want to be the lender on this one, you’re going to make it, you’re going to make more money than we will, but you’re also taking the risk. So when you have an unknown deed of trust, so they actually would have, you know, they would be papered in the deal two different ways as the lender and as a joint venture partner, and then your joint venture agreement.
If you’re going to do that on a long-term buyer, it needs to say, you know, here are the distribution allocations. You know, it needs to be a table of percentage interest table. If she’s a 35% partner, she gets 35% of all distribution. Right. So that’s I’ve got a hard stop in six minutes, but I don’t want to like, let’s assume all that’s in place.
You guys know what you’re doing. You’re out there looking for, looking at houses right? Going on for a couple of ways you can do this. So you’re predominantly playing the brokerage role. Is that. Right, but I’m, I have my license.

[00:40:45] That’s a question too. I have my license hung, I have a request to meet with the actually designated broker to go over this, to see, because I’ve heard rumors and been told by some of the other brokers that I wouldn’t be able to do it at all.
And then I was advised yesterday by a guy who works at a Prescott who does this all day long and he actually started his own brokerage. And he said if I was just my own broker because I have a problem with one to handle all that paperwork for a brokerage, but he says, it’s just your own deals.
And you’d really don’t have any other agents. There won’t be a lot. It’ll just be your normal record. You just keep going. You don’t need to be a broker. It’s a whole lot of expense and pain in the butt. If you don’t want to be a broker then just accept that as the truth. Donna is not a broker. And I’ve people have asked me for years.
I’m not a broker. I’m like, I’m smarter than that. Like I don’t recruit agents. I know that a lot of people do, but it’s not who I am. So it makes zero sense for me to be a broker because I assume more liability, more costs, more, cause more continuing ed, all that stuff.
I have an amazing broker and she’s cool with me doing what I do and I can do it under her, you know, her license. So if you feel the same way, if you’re not going to go recruit and build downlines and you know, build an agency, it’s probably not the smartest thing for you to do. Have you watched the interview?
I did with Chris Prefontaine a few weeks ago. No, so Chris and I have this conversation. He was a broker-owner for 15 years. He’s now. A coach and a course creator and creative finance based on terms, he wrote the book, he wrote real estate on your terms.
He’s got like the QoS system, like his creative financing course. We had this conversation on one of the blogs one of the podcasts we did here raised a plan we’ll get you a link to it, but he ended up. So we, in that conversation, we agree if you’re a broker if you have clearly contained your investment activity.
So what I mean by that, do you have an LLC for any investment activity that LLC has an EIN? It has a bank account and has its own credit cards. And you’re not commingling funds between the entity. There is a clear divide between Donna as a person, Donna, as a brokerage entity, and Donna as an investment entity.
There’s this is clear, it’s black and white. You’ve done the work to structure it. If your broker is afraid of that and tells you that’s illegal, you have the wrong fucking broker. And that there’s just no other way to put it. And we had this conversation. I had to go through dozens of brokers before I found one.
And the attorneys would agree with me. They’re like, no, dude, you’re good. Like your structure is good. Girls were like, Nope, he’s wrong. He’s wrong. That’s fucking illegal. You’re going to. And I go back to the attorney. I’m like, he’s scared the shit out of me, is this really wrong? And he’s okay, you’re good.
But eventually, when you walk into the right broker’s office, they’re like, oh, that’s amazing. Can you teach my agents how to do lease options? Or can you bring, you know, because they realize so first off, make sure you’re structured properly. If you have a broker that’s inhibiting you from doing investment activity and an investment company, again from a legal standpoint, LLCs are treated as people’s rights.
Or wrong. Right. Right. So we’re not talking about Donna, we’re talking about ABC LLC. So that LLC does not hold a real estate license that LLC does not eat dinner with my kids, that LLC holds my houses. Right. I’m sitting here as Donna brokerage entity, which has under your brokerage license.
It doesn’t eat dinner with me either. Like it’s not at my house in the evening. You know, there are boundaries, there are clear legal boundaries that, so if you are not commingling funds, if you’re not distributing, you know, if you’re not pumping money, if you’re using sound business practices, right, you are not violating anything.
And I would suggest that you have an entity for your investment activity. And if you’re doing enough law and entity or assault, if you’re not doing a whole lot of volume to the sole proprietorship, but an entity is even better like an LLC for the brokerage activity. And then you have you. And you’ve got Eno insurance on your brokerage activity.
You’ve got to know, a liability policy on your investment entity. You’ve got a personal umbrella policy across all of that, and I’ve got to run, but if you’re thinking really big and we can pick up and finish this if you’re thinking really big. And I don’t, I’m trying to decide if I even say this right now, I want you to, I don’t want to overwhelm you even more, but potentially it’s a fucking big, and you’re looking at building well from a portfolio you should be looking at spending that kind of money investing in things like either a domestic or a foreign asset protection trust, where you build a real container to conto, to isolate risk.
And if you’re building that portfolio and there’s a structure in. Arizona actually, where you set up an Arizona limited partnership that holds the LLC that holds the assets. That limited partnership has a bridge that goes to Billy’s trust with a cookout and successor trustee. And that’s like your ultimate safety plan.
And if you’re thinking big, and it’s not that expensive, it’s, I mean, this is something that family offices and billionaires are doing, but it’s not that expensive. But if you’re thinking, all right, we’re going to amass, you know, millions and millions of dollars of real estate, then all this other stuff is I can shit there are ways to accomplish a much ultimate level of legal protection for not a hell of a lot more money than some of the things we’ve talked about here.
I like it, I think you should go do it. JV deals with these guys meet that local attorney to Rhea JV gets to know the people come back next week and let’s talk about how you guys can interact in the appointment. Cause there’s a couple of ways you can do this. You can go wearing your brokerage hat.
And then if you can’t get, you know, you can mention my cash buyers and you can deliver the offer on their behalf, or if they’re good in person. You can bring them along as the bad cop, just in case. Hey, you know, when we meet on Wednesday, what I’d like to do is go ahead and bring one of my investor buyers so she can actually get a look at the place.
I’ll make sure she’s not there longer than 15 minutes. Would that be okay? You bring her along on the appointment, the biggest, the easiest way to shut down a seller is when you make that cash offer and they flinch, sometimes they lock up and they just, they’re not, they don’t hear another thing you say, right?
So we’re going to allow her as the investor to, we’re going to play a little bit good cop bad cop. So she’ll walk through the house, do a scope of repairs, come up with some back of the napkin figures and be like, Hey Donna, in front of the seller, I think I’m going to be somewhere around, probably 50 on this one.
Just let me know. And then she gets the hell out of there. Now you are the goods. So if they flinch and be like, where does that bitch think she is coming in here? Hey, listen, man, you can play the good cop and you can smooth that over and still have a brokerage conversation. So there’s a really effective way to do this.
David Pinel has done this as he and Liz have done much too. But you can go as a payer, knowing that gives you more negotiation tactics and in your toolbox, or you can go individually and someone, whoever the strongest front person is knows what the most likely acquisition and disposition strategy are.
And you either get it or you don’t. I also have to figure out the structure. If I ended up retelling it right at all if that happens, then what does that look like? Do I, one of them, my friends, we came up with an idea that I put a percentage in the pot for the com the business, because it, the marketing and stuff that we did together, help get that trends.
You know, that interview basically. And then the rest is mine, you know, cause either way, I’m not to pay brokerage fees, which is not much, I only pay three 50 per transaction. So with Eno and everything, it’s really reasonable. But you know, what does that look like? Because I’m not going to walk away from it completely if I can retell it, you know what I mean?
If I can put it on the open market as a listing, I’m not going to stop. I’m not, that would be ridiculous. I am a realtor, you know, I would say on a snail-like that, be sure. And really start to picture these boxes. Like Donna, the person, Donna, the broker, Donald the investor in that scenario, Donna, the broker wants to list.
That basically was referred to you by Donna, the LLC, the partnership member, right? So you, as a broker could pay a marketing fee to the LLC that you’re a partner at now you’re entitled to 33.3% of that if you’re an equal partner in it. But really think about how separate these things are and it’ll help you understand how to fairly structure these things and make sure everybody else has also had that kind of cognitive map of what your structure is.
Right. Got it. Okay. Awesome. I know a lot more than I know I told you, that’s why I said to you, can I talk to you because I’m like really confused about what’s MC I’m just hearing so many different things and I just don’t know next week. You guys aren’t likely to be going on appointments together, so that’s why I’m willing to park that part of the conversation for a bit.
What I want you to do is get together with them in person. And get something, get, start getting this out on the table and be like, listen, you know, I’ve talked to some high-level attorneys, it’s probably going to cost us a considerable amount of money to draft a partnership, you know, a true operating agreement that would be safe for us and our families.
But today I just wanted to have a cocktail and talk about exactly all the ways we can make money, what our long-term plans are as humans like as people, not as partners. And really just make sure we’re on the same page because, you know, I’ve talked to some really smart dudes that have had partnerships and really warned that the partnership is only the right structure.
In a very small set of circumstances, usually, there’s a better structure. And I think what you’ll find that you guys can get along harmoniously and make good money, but you don’t have to be on the same operating agreement. And the other thing that the considered on a 54%, 53 plus percent of people go through a divorce, and most of them don’t have asset protection plans.
Those things can spill over into your partnership. So just keep in mind, it’s bigger than the three of you. It’s their kids, it’s their estate, it’s their marriage. You gotta know that these are people you can trust that have the same values you as the easiest way. Exactly. Do it this other way, where they can still make money.
Like you just said, is it really more about the money flow that they can make? And doesn’t matter what, how we structure it? Do you know what I mean? As a partnership versus just as, like you said, a joint venture or something like that. So that’s a good way to think about it. Okay. Awesome. Thank you so much.
Please come back next week. Let’s keep this conversation going and with everybody else. Thank you for contributing, John. Thanks so much, man. I really appreciate you allowing us to bounce things off of you, Dave Gwinn I didn’t get to you back next week, man.
I got to hear how you doing all right. Thanks so much. Yeah.