What's working in Marketing Now is an episode we created to talk about what types of marketing channels and strategies are working best in our market at the current time. As the market conditions change and more and more competitors are entering our market we have to stay ahead of the pack and are always testing new strategies to reach our local motivated seller. Listen in as we explore what we are doing now to keep the deals coming in and what we have been seeing from others all around the country.
David: Alrght guys welcome back to the Discount Property Investor podcast. I am your host David Dodge, co-host Mike Slane, hey Mike.
Mike: Hey Dave, how are you buddy?
David: I'm good. Welcome back guys.
Mike: Thanks for coming in, thanks for tuning in, thanks for listening.
Mike: We are excited to chat with you guys again today. We love the feedback, we have had a couple of recent comments; people saying they are glad to have us back on. We are glad to be back.
David: Glad to be back guys.
Mike: Glad to be recording again for season 2.
David: Hopefully providing value to you; teaching you guys a little something here and there, that's the point.
Mike: We kind of like it, so we may as well. Win-Win, right? So today, what are we talking about, Dave? We are going to--
David: What is working in marketing today. Did I word that right?
Mike: Something like that. Sounds like we are talking about marketing today. So that's the plan.
David: We are basically going to share with you guys what we're doing and what's working with us. Just what we are seeing from our competitors and other wholesalers in this space. Not only locally but nationally. So I think we have talked quite a bit in previous episodes in season 1 about marketing efforts, and direct mail. Direct mail is obviously--
Mike: A staple.
David: A staple of what we do in our business. We continue to do direct mail. I have noticed over the past year, year and a half that the response rates for direct mail have started to slow down a bit. I think that is probably due to competition.
Mike: It's definitely-- a very competitive marketing, in any market you're in.
Mike: There is a lot of new people getting into it, a lot of people sending mail. So it is harder to get attention off someone who has a property. You have also got a lot of savvier people, again they are going to hang onto the 15 post cards, when they are ready to sell they call all 15. So you get a little bit of that, so again the direct mail has been a bit more of a challenge. Again, I would never cut it off. Let me clarify that; as long as we are still getting a deal out of it. As long as we are still making a profit on it I wouldn't cut it out.
Mike: If there are no calls coming in, then eventually it would get cut. For the time being it is a lower performer, but it is still working. So we do it, and I would absolutely encourage you to keep doing it. If you are just starting it is a great way to have inbound calls coming in. People that are interested in selling calling you, versus having go out and find people that are interested.
David: That's true. Obviously direct mail as Mike said is one of the staples in this business.
Mike: Let's cover a couple of others we do too.
David: Yes. One thing I wanted to mention really quickly before I forget. We had a coaching call with one of our students just yesterday. I asked him, "Have you posted on Facebook yet that you buy houses?" He said, "No I have been meaning to do it." I said, "Stop what you're doing right now and make the post. It will take your 30 seconds." I wanted to just talk about this real quickly, because if people don't know what you do, if you keep your business a secret; the only person you're really hurting is yourself. You want to get out and be like, hey I buy houses. Post it on Facebook, post it on social media.
Mike: 100% my favorite quote is, "No matter what business you're in, you are in the business of marking." Facebook is great, social media, social marketing. Basically get out there and say, hey i'm buying houses.
David: Let people know that you're in the business. That is a free channel for marketing.
Mike: 100% free, you're friends, your mom clicks like, then someone she knows sees the post. It is unbelievably powerful. You need to it. It's funny because we just let it go that long and didn't catch the fact he hadn't done that yet. Oh no I haven't done that. What! You got to do that.
David: Right, I mean me and Mike get several deals a year from friends of friends. Basically people like I said, or that Mike said who will post online. In the posts I do I copy and paste it every three or four weeks. It just says, 'Hey Facebook friends' or people that I don't see that often, 'just a quick reminder that I buy houses for cash. So if you or anyone you know has a property they wish to sell; call me, maybe I can help.' That's it, keep it short and simple. I think my post is half of the number of words I just used.
David: It's small. Basically what happens is people will share that post, or friends of friends will see it whenever they like it. It kind of has a ripple effect where it goes down. We bought a house just a couple of weeks ago from someone I didn't personally know, but they were a friend of a friend.
They were like; hey my friend said that you buy houses. If I hadn't shared that information with the world on social media; that would have been one less--
Mike: I can't tell you how many people just from high school, college or whatever are like, hey you buy houses, are you interested?
David: You haven't talked to them in years.
Mike: Exactly, probably someone I would never pick up their-- I don't have their phone number. But yeah they are reaching out to you, it's great.
David: Sorry went off on a tangent on that, but that's very powerful guys. I think people forget to do that. Don't keep your business a secret.
Mike: I can't believe we haven't harped on that more. So yeah it's really good to keep that in mind.
David: So direct mail, social media, definitely use social media. Bandit signs I think is next. Bandit signs are great; we still use bandit signs in our business today. We are big fans of bandit signs.
Mike: So we got bandit signs, we also got bandit signs on wheels on the back of cars. We have also got just the magnets for our personal vehicles so you can pull it off if you want to. So lots of different ways to utilize bandit signs.
David: Door hangers, we have door hangers. I have them in the door of my car. If I drive by a house that looks like it's run down or vacant; I knock on the door, if no one’s home I will leave a little hanger on the door. If they have a storm door even better, because that hanger will be protected from the weather. If they don't come back home for four months, it will be there when they get home. So basically just getting the message out to as many people as you possibly can.
Mike: I haven't done it in a while, but posting on Craigslist, we buy houses.
David: We have virtual assistants that do that.
Mike: Okay that's why I haven't done it in a while.
David: We outsource at this point, Mike.
Mike: I forget. So posting on sites like Craigslist, Backpage, EBay Classifieds, there is a couple like that yeah. They are not as popular but--
David: Craigslist is probably your best bet. But in some markets you may have five or ten people posting so it can be competitive. But just because they are doing it, doesn't mean you shouldn't.
Mike: Do you know what's funny? We talked about Facebook-- Facebook now has became--
David: Marketplace too.
Mike: Become powerful for local areas. So if there is a local market in your area you can post in there, hey I buy houses in one of the areas in our community. [00:07:36.12 - inaudible] anyone know anything for sale? So there is lots of ways to use social media and really kind of plug into that. Relatively free, it is free.
David: It is free.
Mike: Post and try to find deals.
David: So other than the free sources online like Craigslist and so on and so forth. There are paid sources as well.
Mike: Starting to power up here in the effectiveness of our marketing efforts.
David: These ads we are going to talk about next, they have a cost. But you are also going to be getting higher motivation of people that are going to be using this forums or sources. So the two main that come to mine would be-- creating a Facebook ad, which would then have a small commercial or a picture. Then they click into that and there would be a small forum that says, hey let us reach out to you, provide us your name, phone number, address, one of our people will contact you immediately. If they don't want to call the number that you provide. Then I think the most expensive form or marketing as of today; other than television or radio or billboards, which are all other sources of great marketing, would be like PayPerClick through Adwords.
Mike: It's our most expensive for sure. PayPerClick is expensive. We can pay upwards for 20 or 30 bucks for a click.
David: For one click which is great, because-- you kind of notice the more money you spend on your marketing campaigns are per lead in a campaign, you are going to get a higher level of motivation typically. Not always.
Mike: That's per click so it's really per closed deal, or even per appointment.
David: You may have five clicks that don't even call or fill the form out. Of that you may have one click that's an appointment. Then you may have one deal out of every four or five appointments. So you have to run your numbers. You could end up spending anywhere between $200-500 per deal. But if you are netting out $5-7000 on a deal, or even $15,000 on a deal; it's worth it all day long to do so. So you got to just keep an eye on these numbers.
Mike: PayPerClick is great, a top performer right now. Again, I think it's because-- this is just my hypothesis, because the market is competitive, a little bit more flooded; the cheaper methods of advertising are just not working as well.
David: Well the barriers to entry are lower. So you have a lot more people that are using those channels. Like for instance going on Craigslist and saying I buy houses. That is free for you to do that; so the barrier for entry is very low. So anybody that wants to get into wholesaling or is in wholesaling can easily go do that. They don't have to have a budget to do that.
Mike: A budget and skill set too. To actually get the leads like we want. We played with it for a long time.
David: It's not worth trying to learn it. I would say outsource it is your best bet at this point.
Mike: Again that's our person opinion. I think we are both relatively text savvy individuals too.
David: For sure.
Mike: Again, if it's your full time thing and you like it, if that's your thing then go for it. But I would recommend trying to find someone to help you run your campaigns. That is going to add to the cost as well, but that's part of the game.
David: I think the main point though is that there is really no right answer to marketing. Just do it.
Mike: Nike this shit, just do it.
David: It's like-- people ask me all the time; how many letters should I send out? What frequency? It doesn't matter. If you haven't sent a letter out yet, you are thinking way to into it, just buy some stamps and write letters, throw them in the mail.
Mike: You could use the-- I buy houses; throw the phone number in there.
David: I think it's so funny online too Mike, I think you will probably agree with me on this; when people are like, we have tested direct mail for years, we have the secret letter or the secret sauce-- I don't disagree that certain things that you do on your letter may increase response rates. But if you are in that analysis paralysis that you need to have the perfect letter and you just wait not to send it, because you want to make it right; you're hurting yourself.
Mike: That's true. We have to talk out of both sides of our mouth on this one because I agree with that as well.
David: We have spent thousands of dollars on seminars to increase our response rates, but at the end of the day-- if someone wants to sell their house, they get a letter for you, they are going to respond whether you have a cute picture of a puppy on it or not, or a PS at the bottom. Yes there are little things you can do to help, but at the end of the day it is not going to be that much different. Use a crayon, it is going to be the same thing.
Mike: Probably going have the same, maybe a higher response. We should do that; let's test it out. We will print some up here later today.
David: A-B test guys.
Mike: The next time the [00:12:46.12 - inaudible] guys daughters in, we will have her write up some of them in.
David: Six or seven year old kid, test it out. But the key is do it. You just said it perfectly, Mike. Do it. Get out there and drop some letters in the mail.
Mike: We have no affiliation with Nike; I would just like to say.
David: No, not at all. But anyway, get out there and hang some bandit signs up guys. Post on Facebook, post online, post on Craigslist. If you have a budget, do some Adwords or some paid advertising. It doesn't have to be Facebook, it could be Instagram or Twitter or-- whatever social media site you like to use, it doesn't matter. Create some campaigns and get out there. Again, the wider reach that you have to show people what business you're in, the easier it is for people to do business with you.
Mike: Let's talk about the other one. We haven't even talked about it yet. Cold calling.
David: Oh cold calling. That has been huge lately.
Mike: Well you said your phone is melting.
David: Pro tip, don't use your cell phone when you're cold calling. Whenever you get in the car and you want to drive somewhere, you will have five or seven missed calls.
Mike: In Dave's defense we have changed phone systems recently. He is using his cell phone to make a lot of calls.
David: I don't mind it, I don't care less if my phone is ringing or not. But it is frustrating whenever you're driving and you get a call, because you are not prepared. It changes the whole scenario whenever you are in front of a laptop. We use Podio, we have talked about it several times, but you can go in and maybe a type a phone number in, you can see this is Jim at 123 Main St, and I called him three days ago. That gives you a little bit of information which is power.
Mike: Hugely powerful.
David: Whereas you picking up the phone and saying, hey this is Dave, and they say, hey this is Jim I'm calling you back. It's like, ok now--
Mike: Have to fish for details.
David: I am in a position without any power now. It's like okay I called 600 people in the last three days.
Mike: But you can't tell Jim that.
David: Can't tell Jim that, so it's like okay now where am I at? So I think the main point is, get a dedicated phone line for this. So if you are not in front of you computer when they call back, they can leave a voice mail or you can see the missed call. There are free sources out there like Google Voice.
Mike: We were just talking about--
Mike: Get the Google Voice set up, then go back into our Podio system, have the VA call back if we miss a call.
David: What were we talking about whenever you say--
Mike: Cold calling.
David: It's very basic. So how do we do it?
David: We buy lists that we mail to. We use the same list we mail to. What happens is, whenever those letters come back, we know we have just spent 35-50 cents to get a piece of marketing to somebody who it didn't reach. So instead of throwing that away, we are going to go in, skip trace that. Tons of places online that you can use to track somebody down. We will essentially try to find the new address, then update our sheet, update our list with that address. So whenever we go to mail a second, third, fourth or fifth time; we are actually getting that to reach the right person. But also, while we are in there, if there is any phone numbers or e-mails, because we are already in there pulling an address. We are going to take that information, copy and paste it over into our CRM or spreadsheet. We may even try and save our self the 50 cent on marketing and just pick up the phone and call them.
Mike: Ding! Ding! Ding!
David: Just like we talked about, we are going to cold call. We are going to say; hey Jim this is Dave, I sent you a mail piece--
Mike: We might take it back a bit, we might say, hey Jim it's Dave. A little aggressive there, partner.
David: I want to buy that house Jim, damnit. I will just say, hey Jim this is Dave, I have sent you a letter, it came back. I found your information online, your phone number. I hope I’m not bothering you. But I noticed you owned a property at 123 Main St. Keep it simple guys. Jim will say, yeah I do own that property. In that scenario, that conversation could go a number of ways. It could say, yeah I live in that property and not interested in selling. Okay great sorry for bothering you. Do you mind if I call you back in six months to a year to see if you are still owning that property? Another scenario could say, yeah I own the property as a rental, and its tenants suck. You guys want to buy it from me? Great, make me an offer. So the scenario can go multiple ways. By reaching out to people, some people call it TTP, talk to people, we call it cold calling. I don't want to try and re-write the book here. But you are just cold calling individuals that you know own properties. Now, is it always going to be a good idea to just call down the list? Not necessarily. I personally like to call the absentee owned properties or the vacants. Just because those people have a higher level of motivation to sell that property you would think, in theory; than people that are living in that house and have been for six years. They may or or might not move. We call both of them. I am not saying I discount those people. But if I have to chose between an absentee owned phone call I could make versus an owner occupied call; I will make that absentee call all day. Just my two cents.
Mike: Or a vacant.
David: Or vacant.
Mike: Vacant house, there is some motivation there. They got to get it rented, got to get it sold or whatever. Again, they have a liability, expenses. There is motivation.
David: We have-- we bring our team together once a week on Tuesday evenings. We all get together and cold call as a group and it's fun. We have a good time doing it. Each person will do two or three hours. Each person makes maybe 50-70 calls in that time. Typically we will set at least one or two appointments per person within a two hour block. Just people-- often times if you do call an owner occupied individual and you say, hey my name's Dave, I am with House Sold Easy Properties-- that's my pitch and you can use your own. But we will say, I am looking to buy properties in this area. Even if they are owner occupied, are you interested in selling your house? Or would you at least like to know what your house is worth? That's kind of a good hook to go for.
Mike: Owner occupied is fine too.
David: It's fine.
Mike: If they are ready to sell, they have lived there for 30 years.
David: They might not be ready to sell, but I can bait them by saying, aren't you at least interested to know what an investor would pay for your house? Or what your house is worth? They say, yeah that does kind of interest me. Right then and there I get an appointment, go out and built rapport. They might not even be a motivated seller today. I don't care, because I have the long term goal in mind. So I will go out and meet Jane and Joe for example, just making up names here.
Mike: That's weird, those were my neighbors.
David: Maybe you want to buy your neighbors house. I will say, hey Jane and Joe; thanks for having me out. I know you are not interested in selling right now, that's ok. Here's what comps in the area are selling for. I am going to average these numbers, here is what the property is worth. However, you need some repairs. Either you can make those repairs yourself and get this number, or sell it to an investor who is going to discount the property a little bit, take the repairs off, and this is what that number would be. Often times I get out there and I am educating them, but at the same time I am building rapport. Oh hey Jane/Joe I like your cat, I have a cat. Just start building rapport, become friends with them. When you're leaving you don't have to necessarily pitch them on selling the house. Instead you just say, do you mind if I follow up with you in six months or a year to see if things have changed?
Mike: Right, so you can make your offer then. You could say, listen I would pay $100,000 today. They say, oh I wouldn't even consider that. Then you can go--
David: No problem I wouldn't even consider it if I were you either.
Mike: That makes sense.
David: That's a terrible offer, okay?
Mike: Your house is worth three times that.
David: But stuff happens. And sometimes the scenario will change to where they need that money quick.
David: That no longer becomes a bad offer. If they wanted to use an agent or whatever else it wouldn't be quick, it wouldn't be cash, it wouldn't be all the things that we offer. So again, we have said this several times in previous episodes but, we are not out to get people, we are out for that win:win:win, and we get it. I even laugh sometimes when I make an offer because it's so bad. People will be like, that is the craziest thing I have ever heard. I say listen, it is just as crazy coming out of my mouth as going in your ears, I promise you. But the funny thing is people will hang up on you, or tell you that you're crazy, but a year later they will call you back and say, hey is that offer on the table still? The thing is like-- no one is laughing at that point. Yeah that was crazy at the time but now you need that money. I don't necessarily need that house, but if it's a deal I am not going to walk away from it. Therefore that's my incentive, and your incentive is quick, timeliness, cash, ease of use, all of the above.
Mike: A good wholesaler does provide value to the market. People are stuck with an asset that's not liquid, and we provide that liquidity.
David: That's so true. People always over look that. They are like, you guys are trying to steal people's houses or whatever. Yeah I can see how that may be a perspective. But on the flip side, you just nailed it Mike. I am going to repeat what you said because I can't say it any better; we provide liquidity. If you have a nice big house and you want to sell it in a weeks’ time, and you want to hire an agent to do so; they may be able to bring in a buyer, but they are not going to be able to close in that amount of time.
Mike: Not even close.
David: We can. In three days.
Mike: So you have to go get a loan, a bank loan is going to take a minimum of 30 days to-- you can't eat a house. If you need cash, you need to sell it. We can close a lot faster than the banks. Again, when you work with a good wholesaler they can help you do that. What's working in marketing today, just do it.
David: Just do it, just do something.
Mike: There is a hierarchy to it, we would suggest in addition to your direct mailing-- skip trace some of those names, at least the ones that come back to you at the bare minimum. In your really hot areas I would say skip trace even more and start making those cold calls.
David: Skip trace them, make those cold calls if you can't reach the individual, but you get a new address, update your mailing list so your mails are not bouncing back. I think another reason cold calling has become so popular recently, is because no one likes doing it. I don't really have a phone when I am sitting back and cold calling, but I like getting the appointment. So to me it has a value in the end. There is a reward let's say. And not everybody takes the time to go skip trace. What they might do is the letters come back and they will take that name off their list. So if you have 40 people, that's an exaggeration, let's say six people in a market place that are mailing to an individual. All six of those letters bounce, and only one or two of those people then take the time to skip trace and re-mail, or even call; you have just prevented yourself four competitors for that particular deal today or down the road.
Mike: Oh yeah.
David: It's definitely got a lot of power. As Mike said, just do it, do something.
Mike: Thanks for listening guys; we will catch you in the next one.