TRP 112: Interview with Danny Johnson, the “Flipping Junkie”
August 16, 2021
Episode Description: Learn how Danny transitioned from software developer to real estate investor and now is focusing on creating passive income and helping others!!!
Transcription
Announcer:
If you’re looking for honest, real world, no BS advice on how to create income, build wealth and achieve true freedom with real estate, you’re in the right place. Welcome to another episode of the Real Estate Preacher podcast show where your host, Randy Lawrence shares with you, his experiences and strategies from over decades as a successful real estate investor. This episode is sponsored by Prosperity Capital Partners. Learn more at prosperitycapitalpartners.net. Now, on to the show.
Randy:
I want to welcome you to today’s episode. We’ve got an exciting issue here and I’ve got a great guest, Danny Johnson, with us. He is a veteran real estate investor. He’s been flipping and wholesaling properties since 2003, done over 1000 deals and really got focused on bringing his financial and time freedom to his real estate business, not only for himself, but others and created the forefront CRM for real estate investors. Also, hosts a podcast which we’ll dive into as well. But again, Danny super grad to have you on the show. I know it’s going to be a blessing and a fun time. So welcome to the podcast.
Danny:
Thanks, Randy. I appreciate it. And we just had a conversation for my podcast with, I interviewed you, and I have to say before we get going because it’s in my mind still. I still just want to say that I appreciate in that show, how much you talked about finding God’s path for you, or if you want to call it universe or whatever, finding what is right for you and not just seeing what someone else has done and thinking, I want to have that success. And if it’s not something that just feels like this burning desire that comes from within for you, maybe it’s not the right direction. So I appreciate that that was sprinkled throughout our conversation and it shows why you’ve had so much success.
Randy:
Awesome. I appreciate it. And then for you guys listening, I know once that episode publishes, we’ll publish that out so you can check it out on Danny’s podcast. It was a great time and this will be as well. So let’s give a thumbnail to the listeners about your background. I know ’03, it’s funny enough that same thing for me was ’03. So why don’t you dive in, share a quick synopsis to the folks of that journey for you and how you came to where you’re at today?
Danny:
Sure. So I went to school to get a computer science degree, became a software developer. That was right around 2000 which was the ideal time. I had a professor that came from Stanford. It was his first year teaching as a professor. And he said, my buddy started a software company, but I wanted to teach. And was, what was the software company they started? It was Google. But back there in ’99 or 2000 nobody knew what that name was. Needless to say the next year he wasn’t there. He was not teaching the next year. He was over with them doing that. But anyway, probably worth hundreds of millions just from that.
Danny:
But anyway, I really loved software but after graduating I was working for a defense contractor in this room called a SCIF, which is like a vault, and there’s no windows or anything. And the work wasn’t very exciting. I was actually miserable. And at that time my father started flipping houses and he was just having the time of his life. You just talking about his daily adventures is what it sounded like. I was going to this property and making an offer and that seller laughed at me, but this other one said, yeah, let’s sign it up, and all these things. He’s just enjoying his life.
Danny:
And while I was growing up we always struggled. He was an entrepreneur but wasn’t finding a lot of success. He’d a lot of failed businesses, a lot of different things. A lot of the times he was a contractor, working on houses and stuff to make ends meet. And one of the people he worked for, did a lot of work for as a contractor, was a real estate investor here in San Antonio. And so I got to be a part, as a kid, of some of the demo cleanup and some of that. So I don’t know how much asbestos and stuff I’ve inhaled, but there’s all that, got to see that side of the business and be in some of those houses.
Danny:
But he started working with him and then investors started mentoring him and so he was having all that fun. So I felt like that pull to just, oh man, that’s a call to adventure for me. I want to do that. I just know it in my heart, I want to do that. And so I started doing that. Did it part-time for about three years. It took about nine months to get the first deal. I was going through all this stuff of, I can’t do this. My dad did because he’s different or something. Struggle with that.
Danny:
But as soon as that first deal came, the next ones followed shortly after. I couldn’t quit the job, the security net, safety net of that paycheck. I could have fun with the real estate because I didn’t rely on it for survival. But after three years I think God had a plan for me of, okay, it’s time for you to go, and they fired me. I needed that.
Randy:
That’s interesting. Because again, sometimes it’s like the eagle. A lot of times the eagle, it has to turn up the nest so that the eaglet will be willing to jump out because it’s uncomfortable. So sometimes, where you knew you weren’t happy there, you saw this opportunity, you started doing it and, wow, hey, I really like it. And then we tell ourselves something that’s maybe not true. And then it’s, okay, God’s got to work some different circumstances, and in that situation they terminated you and that gave you the impetus to, hey, I’m going for it.
Danny:
Yeah. So when the manager came to me and said they’re going to let you go, but I’m fighting for you, and I told him, no, don’t fight for me, he was confused. But anyway, it was really awesome. It was cool to jump into that full-time, doing more and more flips. And most of it was fixing and flipping, rehabbing. We started doing some owner finance notes. Picked up some rental properties. And then the market changed, the market crash, but San Antonio wasn’t so bad. Texas didn’t have the crazy Florida, California action going. Phoenix, even. It wasn’t like that. We did see a drop, but it wasn’t anything crazy.
Danny:
But at the time nobody knew where it was going. We didn’t know what was going to happen in all the different places. And so started doing some owner financing and selling the notes at closing, for discounts. So we’re still able to flip, it was pretty cool. People are paying lower discounts whatever, for those notes that were newly created. So that was cool. And it was going, like you had talked about in our talk before, going with the flow. Not going against it, but not sticking to the wanting to continue doing the flips like we were doing before, that’s how you get in trouble. Like banking on appreciation or anything like that.
Danny:
So anyway, we did that for years and years and my ex-wife and I, it was us doing everything for about eight or nine years in the business. And again, it was me telling myself things like you had just talked about with the security of the job and the paycheck, and just the keeping myself comfortable was really what it was about. And treating the business like a hobby. I did not go to business school. I didn’t want to have anything to do with my idea of what an aggressive business person was like. There’s just this idea of that for some reason. And maybe growing up with the difficulties that we had I had that view of, sometimes, of other people. And it’s interesting as we get older and mature and see those things that weren’t so clear in the past, but-
Randy:
You’re hitting on some just nugget bombs of truth right here. Again just from the, not only the belief element in yourself, but also being influenced by your circumstance. You know what I mean? Like you said, your father, those experiences just growing up no doubt provided some color or influence into thinking about how you viewed business. And then even coming to that epiphany of, hey, I got to take this seriously. A business and not a hobby.
Randy:
And folks who are listening right now, I mean again, being honest. You listen to the podcast, are you taking your investing seriously, like a business? Sometimes it’s, oh well, my dad didn’t do this and so that’s coloring in the background of the mind of, ah, I don’t know if I want to take that step. A lot of times you’ve got to be willing to take different steps to get the results you want, which is exactly what you did.
Danny:
Yeah, for sure. And looking at some of those reasons why we didn’t make that transition and we were doing everything ourselves is in one of them, a big one was this idea that without having employees or without having anybody else on the team, we had freedom. We had the ability to go on vacation for two months and not worry about anything and live that investor lifestyle, real estate investor. Life of freedom and fun and all that stuff. Well, guess what? We never got to do that because we were too busy running the show.
Danny:
So this idea that that was possible and that was the way it could be… And obviously if you tone down your goals and you do choose to just do six deals, six fix and flips a year or something, and live meagerly, you can do all those kinds of things, for sure. But the big thing was even taking a weekend was difficult because we’d be packing and leaving, I’d get a call from a super motivated seller, and I’m stressing the whole time. Because it’s, who’s going to go look at it. If I can’t go, I don’t have someone to go look, I’m going to lose that deal. It could be $50,000, $100,000 deal.
Danny:
And so there was a lot of stress. And so we don’t see sometimes the big picture and thankfully I’ve met some people and they showed me that it was possible and that it was actually in our best interest to bring people on, train them and systematize the business. And so we did that probably about five, six years ago.
Randy:
That’s awesome. It’s funny what you just said there about that reflected back to a couple of people I know. There’s, well, I want to pull my money together and buy an apartment complex, their thing. They do a different line of work, whether it’s attorney or whatever. And because why I wanted to do it, I want to be hands-on. It’s, well, you’ve been working at that now for three years and it still hasn’t even materialized. Because they don’t have the pieces necessary to do it. And it’s, their thinking is one way, but realities are different. Just like what you were saying of, hey, I’m thinking I’m going to have vacation time and I’m going to do it myself. And then the reality is it wasn’t that way at all.
Randy:
And so oftentimes we get trapped into a false thinking and then we have to step back, and thank God you did, you stepped back and you look at, what’s the results that I’m getting. And then am I happy with those results. And it’s then like you said, thank God somebody came along, it’s a mentor, you reached out. Boom. And now, hey, here’s a better way, different way.
Danny:
Absolutely. And it’s really, talking with a bunch of other people in the same circumstances, of transitioning from doing everything themselves to building a true business. And finally actually getting what is true freedom to do other things, is this idea also of I’d be giving up too much of the pie. This whole idea of giving up too much of the pie. This idea that we’re not making enough to really support a team and they would take all of that. Just too much of the pie.
Danny:
And in reality, I just talked to somebody recently that was saying, when they first brought on a team, even just the acquisitions person I think, that year they quadrupled how many deals they did. So all of a sudden that pie quadrupled and the person got a piece of that much larger pie. And so the whole idea that if you just do it yourself, you’re going to reap all the benefits, is simply not true most of the time.
Randy:
It’s not. And again if a person, folks listening, it’s a scarcity mindset. You don’t think it is, but the truth is, it is. It’s, oh, if I do it myself I’ll have all the more return or I’ll have all the more of the pie, but by bringing other people in there’s more pie. And when you look around the universe, good Lord. All you got to do is go to the beach. Is there a little sand or a lot of sand? It’s a lot of sand. If you look at the forest, is it one tree or an abundance of trees? It’s, we live in a universe of abundance.
Randy:
And so that’s something that, when we look at these things and you’re looking at your business or you’re looking at the investment, you’ve got to think through a lens of abundance. And so, praise God there again. Now, did you come to those decisions on your own or was this also part of the help you mentioned, this mentor that you connected with? Were they a help in that?
Danny:
No. Once again, God had to put somebody in my life to help me see it, because honestly I was fighting against that. I was fighting against that. And have you ever read the book or even listened to the book, a lot of people Audible but, Surrender Experiment?
Randy:
I don’t think so. No.
Danny:
It’s an incredible book. And the guy just decided at an early point in his life that he would surrender to whatever God put into his life, whether he liked it or not, and just consciously had… And a lot of people can say that they do that but to actually like when something bad happens to you and say, I’m going to do it, even though I don’t want to, and on those things.
Danny:
I wish I had started doing that earlier in my life but it made me see that earlier, and this circumstance being case in point, as I was actually fighting against it. I was fighting against those things showing me that there’s more abundance and you don’t have to do everything yourself. And it took, finally having somebody else really tell me, and slap me and tell me, hey, snap out of it. It’s really better to do it this way.
Randy:
Well, I think a lot of us go through that, myself included and folks listening that it’s a very normal human process I think, that we go through that, in the hope we’ll go, like what you said, get there quicker, sooner, earlier, younger. You know what I mean?
Randy:
It’s so funny, kids are taught maybe if you’ve gone to whatever Sunday School class or whatever it was way back in the day and it’s, give and it shall be given to you. And it’s, oh, that sounds good in theory. But now I’ll keep what I got. But then, as you start to grow or you maybe experience some disappointments in life, you start to see that these axioms are actually, really true and that by giving and sharing the pie, you’re actually getting more pie and having a better quality of life.
Randy:
And so that is huge for those of you listening right now. Because I know there’s some folks struggling with that same thing. You’re not getting the results you want. And part of the reason is because you’re trying to hold onto the whole pie. And you got to free yourself up from that. So, awesome.
Danny:
And a story around that, that makes this more practical even in regards to real estate investing and specifically doing deals, doing wholesales and fix and flip, or even picking up rental properties is, I wrote a book called Flipping Houses Exposed. And in that I documented 34 weeks in my flipping business. And it was really a selfish attempt because I was wanting accountability. I was wanting to tell people what I was doing so that I actually do it because I got a little bit burned out and took flying lessons and wanted to just do that and play retired but I couldn’t because the business was suffering because we were still doing everything ourselves.
Danny:
So I was documenting 34 weeks. Every single call that came in, every bit of marketing that I did, what it cost, why somebody called and why they were selling, what I offered them, how I analyzed the deal. There’s 34 weeks. I ended up documenting 495 leads. This is qualified leads where motivated sellers are saying, make me an offer to buy my house. 495 of them. Guess what, I only did about 11 or 13 deals from that I think. That’s one out of every 45 leads became a deal. And a lot of people read that book and said it helped them get into the business because they realized it was a numbers game. They saw that. Instead of going out and trying to make offers on three properties, not getting them and saying I can’t do it.
Randy:
Ah, it doesn’t work.
Danny:
So it showed maybe the volume, maybe to an extreme. One out of every 45 is not very good. Because that’s not a list that I bought. This is marketing and people saw my advertising. But that transition from doing everything ourselves, where I was doing the marketing, I was taking the calls, I was going to the appointments, making the offers, attempting to do follow-up. The ball was being dropped left and right. And when I was looking at our numbers, we were trying to do this many deals, all my mind was saying was we need more leads. What’s some other marketing sources we can try to do to get more leads in.
Danny:
Well, in hindsight, that was the problem. I wasn’t looking at what was going on once those leads came in. Because really in hindsight, that’s plenty of leads to do five, 10, 20 times that many deals. So we hired an acquisitions person, we hired a lead manager, lead intake. We could do the marketing. Someone was always available to answer the calls. And then the person going to the acquisitions, going to the appointments, could take the time to sit there on the couch for two hours and talk with the seller. Build that rapport, do the things necessary to turn that into a deal.
Danny:
So doing all those things and looking and treating it like a true business and saying, every week looking, we got this many leads, we got this many appointments, we got this many offers made, this many contracts. We’re seeing what’s going on. And when one of those starts to trend in the other way, we can look and say, what’s going on?
Danny:
Lead intake is not booking as many appointments. Why is that? Let’s have a talk. Well, I’m just getting a lot of people that aren’t motivated. Well, what makes you think they’re not motivated? Well, they didn’t sound motivated. Stop making those assumptions. Stop making those assumptions. In fixing the business like that we ended up to a point where we had our team doing about one out of every five, or one out of every seven leads became deals.
Randy:
Wow. So hold on here a second. So, doing it yourself it’s one out of whatever, 43, 46.
Danny:
Right.
Randy:
And then, now when you brought in the team it’s one out of five or seven.
Danny:
Right.
Randy:
Much better, much better. And I think there’s a couple of things I just think for the folks listening here, it’s one, you took action. So oftentimes people will procrastinate. They’ll think about it. You see this thing and it’s, all right, I’ve got to take action. Then again it’s, hey, there’s nothing wrong. God got a guy coming in your life that’s going to help you. He says, hey man, look at this. But you took action, and then the result is it got better.
Randy:
Now, how did you go to then, I know you created the follow-up software, because that’s critical too. So you’ve got to have a proper management in place. And again, you’ve got to be able to work with that. So I know you got the background as a software engineer, is that, boom, comes together and you say, hey, I’m going to do this thing to improve the business.
Danny:
For sure. So even since the beginning, having a system to keep track of the leads. But when you’re the only one doing it without automation it’s still, the ball gets dropped. So by creating this, and then we’ve created this one now that other teams are using and people are using because it’s actually helping them automate it, doing the follow-up. Because the problem is leads starts slipping through the cracks. And if you don’t know what’s happening, especially when you start bringing on a team, people could be doing things that you’re not aware of, or not returning calls, or things that you would have always made sure that you did.
Danny:
And so having that, even from the beginning to have everything systematized and everything tracked so that you know what’s going on, because as you have a team, more and more you have to be able to have your KPIs. We follow traction, I think you mentioned before, L10 meetings. So it seems like you guys are too. Taking a look at those so you know the health of your business at any time. It just takes a glance.
Danny:
And it’s like Jim Rohn, having those KPIs, it’s a number. And if you ever listen to Jim Rohn, he’d talk about how he would always ask, assail people. He said, this box here, why it’s just a box and not just a big field for you to write a bunch of stuff in? It’s because I only want a number. I don’t want a story. I don’t want all this BS, I want the number. What is the number? And so tracking those numbers and creating a system that would do that. Do you use Ninety?
Randy:
I’ve not, no.
Danny:
So Ninety.io is a software, I think it’s put out by them, it’s the same traction. You can do your meetings through the software and you track all that stuff and you can have your KPIs in there so you can see week over week what’s going on with the KPIs. You just keep all your meeting stuff together in there. It’s pretty nice.
Randy:
That’s great.
Danny:
Yeah. But the problem was I hated pulling all those numbers and my team hates pulling the numbers and putting them in when all that stuff is in this CRM system that we have. We can just have that pulled in real time all the time. Why are we having to figure it out? And the benefit there is when you see the number, you can click on it and figure out what properties or leads or deals make up that number. Whereas, if you’re just seeing a number you have to determine which ones are these, which ones are the ones that crapped out on us? What is the… So all that stuff is great. I may have lost track of your question.
Randy:
No. That’s fantastic. It shows that there’s a continuous evolvement to the business, gone from tracking it yourself, to automation, to software, to now, an improved version of the software that you can now drill down and see the results. So again, I think what I look at on that, and for our listeners as well, is you look at and see that as part of the business process, you’ve got to continue to evolve and improve. Nothing is static. I mean, good Lord, the things that were done five years ago are not being done exactly the same as they are today.
Randy:
I mean, you look at 10 years ago, 20 years ago, I mean, the internet was barely a thing. Now you’ve got an entire computer right here in your hand. I mean, so there’s a necessity to evolve. And so a lot of times folks don’t take that action because it can be uncomfortable. And that’s part of what it’s necessary is you got to, hey, we got to make an improvement, we got to get better, we got to do this.
Randy:
So now, with the folks that are listening, if they want to connect together with you to find out more about what you do, and or the software, what would be the best avenue to connect and find out about that?
Danny:
Sure. So, I’ve got a podcast called Flipping Junkie podcast and a new one called Braver. It’s just called Braver. B-R-A-V-E-R. For more advanced real estate investors that are looking to go from doing everything themselves to having a true business and building a team up and monitoring everything. And then the software is at forefrontcrm.com. Forefront is F-O-R-E-F-R-O-N-T crm.com.
Danny:
And I am giving away a drip sequence, a follow-up sequence for old leads. So I realized that a lot of real estate investors that aren’t following up for a very long time, have gold that they don’t even know about. And it’s in those leads that they stopped talking to the seller. They don’t know if they ever sold. All that stuff is gold. So here’s a sequence. If you want a free sequence of emails and texts that you can send that are not pushy and salesy, but just get the conversation going again, you can get that at forefrontcrm.com/reactivate. And that’s reactivating old leads, basically.
Randy:
That’s awesome. That’s awesome. Well, Danny, I am super grateful for having you to come on and to share with us and great to connect together with you as well, and just appreciate the value that you’ve brought for our audience here today. So, thank you so much.
Danny:
No, thanks for having me on and enjoyed it.
Randy:
Thanks for listening to another episode of the Real Estate Preacher Podcast. I hope today that you learned something that you can immediately apply in your life or business. Make sure that you check us out on iTunes or at therealestatepreacher.com for more information. If you want to find out more about partnering together with me personally on real estate deals, including apartment complexes, go to therealestatepreacher.com and click on the, Invest With Randy, link. I look forward to talking with you personally. Have a blessed and victorious week, for this is the week God has ordained for you.
