David: Welcome back to the Discount Property Investor podcast. This is your host David Dodge, joined by my co-host, Mike Slane. Hey Mike.
Mike: Hey Dave. How are we today?
David: I'm doing good. I'm doing good.
Mike: Let's get after it man. Let's get after it today.
David: Yeah, buddy. Yeah, buddy. I want to talk today about marketing.
Mike: Talking about marketing.
David: I want to talk about marketing. Marketing is the life blood of a wholesaler. You have to understand that as a wholesaler you are in the marketing business. Okay? If you are not doing marketing and you are a wholesaler, you are probably out knocking on doors, cold calling, so on and so forth. And none of those are bad strategies. But if you're lazy like me, then you need to have a marketing budget. Therefore your phone will start ringing with motivated sellers trying to get you out to their property, so that way they can get those--they can get it sold.
So you have to have a marketing budget.
Mike: It's either time or dollars, right?
David: It's either time or dollars. That is so true. So if you don't have any money to start marketing, that's okay. We get it. I didn't have a lot of money when I first started, and I started cold calling and I started going on on Zillow and Craigslist and now there's a Facebook marketplace. And I was reaching out to those people that had for sale by owner signs or our postings or even landlords that were looking to rent properties. And I was cold calling those people. And I did several deals. We still do several deals-- from those efforts. We have a VA that does some of that from time to time. However, as we get more mature in this business--.
David: Lazier, better way to write to, to describe it.
Mike: You have more money available. Again, you've got more money for a marketing budget.
Mike: Again, why do I want to spend my time? The whole idea of moving up in this game is--.
David: Make more and spend less time doing it.
Mike: Exactly. I want to have more time freedom. In my brain, the real rich is time freedom guys. Like again, to not have to work 50 60 hours a week is huge.
David: It is huge, man. Make myself comfortable here.
Mike: So let, so let's get, let's get some marketing going so that we don't have to work that much.
David: I am with you 100%. So it really truly is-- you know all about the marketing when it comes to wholesaling. Now also you have to understand that you are in the marketing business. So some people that I know will say, oh, I've been invested in real estate for five years and you know, how many properties do you own? Or have you done some flips? And they hadn't, they just been doing wholesales and that's fine. I personally don't think that wholesaling is investing. I feel like investing is more of a long term game, but you still need to buy those properties that you may invest into at a discount. You still need to use your marketing efforts to, to locate those deals. So to me, wholesaling is the marketing business. And the reason I say that is because you need to learn how to market to find those motivated sellers. You need to learn how to target them. So your phone or contact form on your website or whatever it might be, starts getting hits. It starts ringing or it starts generating you leads. And Mike said it earlier, you know, you-- we get lazy. But if we have a marketing budget in place, the leads will continue to come in. So it truly is all about the marketing.
So I want to talk to you guys a little today about some of the marketing that we do here in our business, but also talk about some of the other ways that you can go about marketing to motivated sellers. So there's truly an infinite amount of ways that you can market to motivated sellers. The main ways that we in our business markets motivated sellers would be driving for dollars. We do a lot of driving for dollars. We do cold calling and cold texting-- because basically what we do with that is we will purchase lists online and we'll skip trace those lists and then we will cold call or cold text those individuals to see if they have any motivation for selling.
Mike: And that's a big shift from what we used to do. So the big thing years ago, and again, it's still a staple of the business, don't get me wrong, but we used to almost exclusively you'd, you'd go out there, you'd find a list or you'd create your list with a driving for dollars and you would mail those people because there was really not many other options, right? So you would look up their addresses and you would send them the yellow letter or you'd send them a postcard. And we still do a lot of that. But again, now you can kind of skip that step. Right, Dave? So instead of having to do that mail, you'll look them up and you'll-- you'll try to find that phone number so you can cold call or a text them. Right. I mean, that's, that's kind of a, a shift that's happened with technology and it's just, it's really neat. It's fun to see how the game has changed in the short period of time that we've been in it, you know, five to seven years, something like that.
David: That's right.
Mike: Again it's, it's just something new that is working. So again, you want to kind of keep on top of what's happening in there in the, in the market.
David: That's exactly right. So driving for dollars, cold calling and cold texting. We also do some direct mail from time to time. We don't do a ton of it, but I know that there's a lot of investors that that's all that they do direct mail works. It's just, it can get expensive. All right? But it works.
Mike: And again, I think that we see sometimes it kind of in cycles people are like, oh, direct mail is really working all, it's not working, oh it's really working. I think it's just a, it just kind of depends. So again, it's one of those things stay consistent in your marketing efforts as well. And that's, that's what reaps rewards.
David: Yeah, consistency is the name of the game in marketing. That is such a good point, especially in when it comes to your direct mail. Totally agree with that Mike. Totally agree.
So other than those methods, there's a couple more that we do. Occasionally we'll do bandit sign campaigns. We aren't very consistent when it comes to bandit signs and we just said you have to be consistent. However, the caveat is when we do it, we go hard.
Mike: What's so funny--.
David: We'll buy, you know, a thousand or 2000 signs and we'll plaster the city, but then we'll let it die down and then we'll come back. Go ahead.
Mike: Bandit signs are so funny to me because they do work, but man, they just feel like a lot of work too, you know? And we went, we used to do it ourselves. I used to put out bandit signs, a ton of bandit signs, and then we hired someone else to do it. And it's the same thing. I feel like they don't want to do it because it's a lot of work. And we were paying two bucks a sign, something like that.
David: A dollar fifty to two bucks. He had a paint on there.
Mike: Pretty much they would get out and put out these signs and yeah, it was just tough to get people to do that. So yeah, like Dave said, we kind of go in waves with that one. We should be more consistent with it. So maybe that'll be on our to do list here. Get out some more bandit signs.
Mike: This week, let's do it.
David: And then, other than that we do-- we have some radio ads that, that air, we took a brief pause for those recently, but they're back up as of yesterday. So we got the radio ads going again and that's basically--.
Mike: You're fogetting about a big one is a Pay Per Click, man.
David: Oh, Pay Per Click. Yeah, Pay Per Clicks is good too.
Mike: Facebook advertising or your Google ad words or your Bing or whoever you are going to be able to advertise on-- based on, you know, you're paying for people's attention online. So there's a lot of different ways to do that. It can be pretty expensive, but it can be pretty profitable as well. Again, it's one of those things where you have to, I would recommend, I highly recommend getting someone else to do it for you just because I consider myself pretty tech savvy. Dave, I think is pretty tech savvy as well. But man, when you get into Google ad words, it's just, it feels, it just feels like it's way over my head. Now I can get an ad going and I can spend money on Google ad words, but man, I just don't know what I'm doing.
David: Yeah, you gotta-- I would definitely hire somebody that knows what they're doing to at least set it up, you know, maybe not so much the monitoring of it, but setting it up because there's a science to that.
Mike: And that said, if that's what you want to try to do and you want to dive into that, go for it. You know, maybe do it yourself. But again, I think that it's just one of those things where you could really get off focus of what you're trying to accomplish here. You're not trying to be the best Google ad words, marketing expert, you're trying to be a real estate wholesaler who makes money by flipping houses. You're not trying to learn Google ad words. Again, that's one of the things early on distracted me from really doing deals is I would get, oh I need to do this and learn this and focus on that. No, you've got to do deals. You've got to get properties under contract. So again, you've got to get marketing in place so you can get those calls coming in so that you can then put properties under contract.
David: That's exactly right. So the other way that we like to go about getting deals is referrals, and referrals don't necessarily require marketing. However, we do set up email campaigns and sometimes text campaigns to stay in touch with our contacts to constantly remind them that we are in the business of buying houses. So we buy a lot of houses directly from the seller, but we also buy a lot of houses through real estate agents. So you sometimes you will have a seller that is embarrassed to list their home. They don't want to list it because they may be a hoarder or it's filthy disgusting. Or they may have 12 cats or they may have 14 kids. I mean, who knows what the problem might be, but they may be embarrassed. So what they'll do is they will-- they'll have an agent come over and they'll discuss with the agent that they want to sell the home, but they don't really want to list it. And they'll sometimes ask, you know, what other options do they have? And the agents that are experienced and have been doing it for awhile. They know investors just like Mike and I who are constantly, you know, pinging these people and reminding them that, hey, if you come across that hoarder house or that guy or that, that woman that is just embarrassed to sell, call me. You don't need to list it. And in some cases we'll even pay you a commission still. And we get deals that way all the time. So those are some of the strategies that we use, but there are actually hundreds of strategies to go about finding motivated sellers. If you have a big budget; radio, billboards and television, all of those types of media work, great. But you are going to spend a lot of money using those types of marketing.
I remember when I first started out, I was driving for dollars. I was doing bandit signs and I was hand writing letters. And the reason is is because that is the cheapest and most cost effective way to go about getting your phone to ring. Basically, the way-- the progression that I did was I started cold calling, Craigslist, Zillow, and then I started cold texting because I could-- I figured I could get more people to respond to me cause a lot of times people don't want to return voicemails. And then once I did a couple deals that way, I progressed into buying bandit signs. I purchased a list and I sent some mail out to that list, and then from there, you know, I always just put aside anywhere from 10 to 20% of every deal that we make, I put it aside into a marketing budget.
Now a lot of people think that marketing is an expense, but in reality, marketing is an investment, all right? If you can spend, you know, one, two, maybe as much as five grand, it really depends on the market that you're in. Here in st Louis, we could probably spend anywhere between 15 and 2,500. It kind of varies to get a deal. And our average deal is, you know, $6,000 to $8,000. So if you could spend two grand to make eight wouldn't you continue to do that over and over again? In some parts of the country like California, I know that some people are spending five, six, seven thousand to get a deal. They're going to spend a lot more. However, those deals aren't averaging six to eight grand. They're averaging 20, 30, 40 sometimes $50,000 which really depends on the market that you are in.
So when it comes to wholesaling, remember you are in the marketing business. Okay? You cannot forget that and it's not so much on the seller side when you're dealing with your motivated seller. Once you get a contract and you have inventory, you are still in the marketing business. Nothing's changed. Now you are just marketing that contract to purchase. That is your asset. That's the inventory that you now have, so you're going to do what you can to market that. What I'm missing?
Mike: I love it man. No, it's great. I love listening to you talk about--.
David: I wish that my thing would pull up here. I had a--.
Mike: You keep playing with it. What are we working on over there?
David: I can't get my mind map to pull up.
Mike: The comment. I was trying to get to though, is how I love how you talk about it, doesn't matter what business you're in, Dave, you're in the marketing business. You are a wholesaler, but you are in the marketing business. You have to spend those dollars on marketing to generate more dollars.
David: It's not a cost, it's an investment.
Mike: You have to spend those dollars to earn more, so again, it really does-- it is, like you said, an investment. It's a great way to look at it.
David: Absolutely. Let's see if I can't get this mind map to pull up here. I don't know why it is given me trouble. I feel like--. MindMeister is just not even working today. Regardless though, you need to set aside a marketing budget. Now whenever we get a new student, and we are doing an orientation with them, we tell them, hey, you are going to need to come out of pocket two, three, maybe as many as four or five months typically less, but it could be up-- here we go.
It could be as many as you know, four or five months before you see a return on that marketing, right? So in the beginning it may come across and it may look like an expense. But once you start getting deals, here's the beautiful thing. Here's the beautiful thing. Again, you're investing a small amount to get a larger amount back, but once you start doing deals, you start feeding the machine automatically. So let's say you're doing two deals a month, and your averaging-- let's just say 6,000 a deal. That's a total of $12,000, and if you have $12,000 and you're keeping aside, so let's say every time you do a deal, you keep 10% aside for marketing. Well then every month you are feeding 10% of 12,000 which is 1200 into your marketing budget. Now that can be used for ad words, bandit signs, it can be used for maybe radio advertisements, it can be used to hire a virtual assistant to help you with cold calling. Or it can go into your direct mail campaign. So the cool thing is is it feeds itself.
Mike: And this is not a hypothetical. This is something that you should be practicing too if you generated, it's super, super exciting when you generate that first big check from your wholesale deal, and it's really fun to go out and spend it and you know, and pay off all your bills, but it's important, like Dave said, it takes some of that money aside and reinvest it in yourself, reinvest it in your marketing campaign. Don't let that be a hypothetical. You have to put that into action.
David: Love it. Let's play a game.
Mike: All right, let's do it.
David: It's something new today. I got 50 plus ways to find off market deals. I'm going to, I'm going to list them and I want you to tell me if it's time or money.
Mike: Let's do this.
David: That's all you gotta do and some of them are going to be both and I want you to explain, but we're going to go quick. Okay? So 50 plus ways to find off market deals. Number one, wholesalers.
Mike: That will be time.
David: That would be time. Exactly. You're just going to be networking with these people, friends and family?
David: Bird dogs. Explain what a bird dog is too.
Mike: Bird dogs, that will be a time it's a bird dog would be somebody that will tie me in money with a bird dog. So bird dog is someone who's going to help you find a property. So again, you may network with this person, but then you're gonna offer them probably a referral fee.
David: Love it.
Mike: Time and money.
David: Door knocking.
Mike: Door knocking is going to be time.
David: Posting ads on social media.
David: Time. Unless you hire a virtual assistant, then you're going to be paying them to do it. But yes, so classified and directory sites.
Mike: That's going to be money you're going to pay to put ads out.
David: Pay to put ads out there. Direct mail.
Mike: Direct mail is money baby.
David: Every door direct mail, it's another type of mail.
Mike: Also money.
David: Bandit signs.
Mike: Signs are money and time.
David: Money and time. That's correct. A bandit sign on wheels. You love bandit sign on wheels.
Mike: I do, I love those things.
David: I think it's cool too.
Mike: Those are time and money I would say, it's really both.
David: Yard signs at your own properties.
Mike: I like that man. That's money.
David: That's money.
Mike: You got to buy the signs.
David: Right driving for dollars.
Mike: Driving for dollars is time.
David: Cold calling and dialers.
Mike: Time maybe a little bit of money.
David: Maybe a little bit of money. Joint ventures and investor partnering.
Mike: That's time baby.
David: That's time. REIA clubs.
David: Mass media advertising. That's kinda like your radio, your television, your billboards. Even newspaper.
Mike: That's going to be money.
David: Yup. Bus-- buses and bus stops, which is really cool cause that's like moving billboards and you put your ad on the side of a bus. You have one on the side of a moving truck company.
Mike: Yeah I do-- we--.
David: We, which is really unique and real quickly, how do we get that?
Mike: It's kind of funny. That was my-- that was my bandit sign on wheels. Called and said, would you be willing to advertise on our truck? They said, but we want our know our name on there too. I said, absolutely. Let's do it.
David: Park benches.
Mike: Park benches is going to be money.
David: Probate attorneys.
Mike: Networking. So it's time.
David: This is all together really. Probate attorneys, divorce attorneys, eviction attorneys and estate sale companies.
Mike: Time, time, time, time.
David: Love it. Boom, boom, boom. Neighborhood associations.
David: HOA's. By the way, that is a great way to find motivated sellers. Contact your HOA's ask them who it hasn't made a an HOA payment in a year or three years. Who's behind? They typically need those payments. So the seller is probably behind, bank take backs. Also known as REO's. Time
Mike: Sweet time.
David: I would think so. Local business advertising, which you could break down into like DMV's. I know DMV's are starting to do that now. Let's see here. What else would that be? Shopping carts at grocery stores, but that'd be money. You're marketing. Money, mailers in the coupon books.
Mike: That's money, baby.
David: Haven't had a ton of success with that, but that's just in our market.
I know people that that's all they do and they have great success.
Mike: I've done some local classified ads. It wasn't huge, couple of deals.
David: Overlooked properties that fall out of contract.
Mike: That's awesome. So that's followup and we hit that so much. Hopefully you guys get that from us. That's time.
Mike: Follow up on your leads guys.
David: Hosting your own REIA club or meetup group.
David: Time, another way to find deals.
Mike: This is awesome because there's so many ways to find deals with just nothing about your time. You don't have to spend money. It's awesome. Property management companies. My first like five deals came--.
Mike: Did that really?
David: Well, not the first five.
David: I'd say several. Several of the first five to ten deals I had came from networking with property management companies to just say, hey, who-- what properties are you managing that the sell-- the owners of these properties are just fed up?
Mike: They're ready to sell.
David: They are ready to sell, and you're probably fed up managing them. Call me. I will buy them. And I was making offers at like 40 cents on the dollar to these people and getting deals. It works. Title companies.
Mike: Time. You got to network.
David: Hard money lenders.
Mike: Same, time.
David: Professional services. I'm going to go, cause we've got a lot of time here. Professional services, tradesmen and inspectors, restoration companies, all of those would be considered time. That it's a networking. You're going to network with them. Facebook groups, LinkedIn groups and automated triggers. Also time. What's an automated trigger if you're not familiar? There's companies out, there are sites out there like IFTTT, and basically what you can do is you can go in and you can say if say, if a property hits Craigslist, or even Zillow in this zip code and they use a keyword, like handyman special or motivated to sell, you will get an email.
Mike:Doesn't Google do that too? Google notifications?
David: Google alerts maybe. I don't know how much you can dial it in though. I think it's more for news or just Google. But that's also an option. So automated triggers, you can find deals this way. Real estate agents and brokers.
Mike: There's time again, it's networking.
David: Nursing home staff.
Mike: You're got to pay those guys.
David: You are going to pay those guys, but that's all right. Nursing home staff.
Mike: Time, but we're networking.
David: But that's a great, think about that. Go find people that work at a nursing home, make friends with them. Typically you're not looking for the person that's just a tech or a nurse there. You're looking for the administrator because-- and we've bought several this way. People will come to the nursing home and they will have a house, and they don't know what to do with it, and the nursing home sometimes has to kind of step in and help these elderly people get their finances in order. And guess who they call? They call Dave. They say Dave's bought four or five from us recently. He will give you a fair price, call him up. And oftentimes we'll go out and meet them at the nursing homes. So many ways. Pre-foreclosure lists. Typically you're going to be spending money on those. But you don't have to be, you could get those lists, and then you can go door knock them. Okay. Foreclosure auctions.
Mike: I guess that's time.
David: I would say time.
Mike: Got to show up with cash though.
David: Yeah, that's true. Pre and post tax auctions.
David: Google search for an open record request.
David: Time. YouTube commercials.
Mike: Never done that. When I assume that's going to be a cash though.
David: You're gonna have to spend some money on those. But the great way to go about getting deals.
Mike: We should look into that.
Mike: I don't think we have done that, have we?
David: Your own company website and of course doing SEO for that website. Another way to get motivated sellers, that one's going to probably be a little bit of both. Pay Per Click marketing. You're going to spend some money on that one. Re-targeting, you're going to spend some money on that one. Social media bots, there are bots out there that will help comment, and reach out to individuals in certain areas, and we've actually done deals from social media bots, oddly enough, so that's another way. The stunning open house strategy. This is a great way to find motivated sellers. When you are rehabbing a house, not so much wholesaling it, but you could do this with the wholesale, but when you are rehabbing it, you have a open house and you invite all of the neighbors, Bill loves doing this, invite all the neighbors. They come over and they say, oh wow, you guys really did a great job. You know, I got a house down the street that I've been considering selling. Would you want to buy mine and rehab it too? But you can do this with wholesales too. It doesn't have to be stunning. It can just be the open house strategy. Ex Christmas cards to all known contacts. Love this method.
Mike: Yeah that's great.
David: Again, you're gotta spend a little money doing it, but all you are doing is reminding people that you are in the business of buying houses, and if you want to send your cards to the motivated sellers that you've bought properties from in the past, that's another strategy cause they may know people that are also looking. A couple more here guys. Mass text blasts or voicemail drops, you know, to your existing list. That's kind of more of a followup strategy. That's going to take a little bit of time and a little bit of money but not a lot of either. Networking and following up is basically covered on all of these. And then the last but not least would just be the Facebook marketplace. So that's 50 individual ways that we have given you guys on this episode to go out and find motivated sellers. All right? There are motivated sellers everywhere, but this podcast is all about marketing. So again, you're going to have two ways to go about market, you have a time budget or you're going to have a budget of money, and if you don't have a lot of money, that's okay. I said this before, and I am going to say it again. You can use your time to get out in the field and make those cold calls. Do some door knocking, drive for dollars, maybe even put up some bandit signs.
You don't even need to buy them. You can use cardboard boxes. I've seen people, you know-- they will just use cardboard and they'll write on the cardboard and they'll staple it to a telephone pole, all right? The other approach. If you are scaling or you want to scale, or you have some money, or you just are lazy like me, you can put some money into a budget and you can build yourself out a marketing campaign. Mike, anything that you want to add? We're going a little long. I want to wrap it up.
Mike: No, let's get to marketing. Get out there and do some marketing guys. That's all you have to do.
David: I love it. Let's talk more, more action, more marketing. Signing off. Guys, thanks for listening.