Today David talks with his buddy Gary Boomershine about Gary's company; REI Vault. We discuss the struggles that most investors have trying to manage all the different jobs of one's business and how it can be overwhelming taking on too many jobs. (aka wearing too many hats) They discuss how most people get into wholesaling real estate and/or investing in real estate for freedom but after they get started they find that they have the exact opposite of freedom. Many times they become a slave to their businesses. Gary has been working diligently for several years on putting together a team of the best VA's, marketers, cold callers, and CRM experts! He has built an amazing team and he puts that team to work for YOU... This will allow you to take off several of those business owner hats. His team will handle the marketing, the cold calling, the follow-up while leaving the closing and negotiations up to you! Let them do your outbound marketing as well as help with all the follow-up efforts so you can focus on what makes money, MAKING OFFERS! This can be a true game-changer for many people that get seriously stressed out about doing all of these items as well as trying to run appts, make offers, and close deals. If you aren't aware of Gary and REI VAULT you definitely need to check them out. They seriously ROCK!
David: Alright guys, welcome back to the Discount Property Investor podcast, this is your host David Dodge. I’m actually joined by a good friend of mine today, his name is Gary Boomershine. Hello Gary, how are ya, buddy?
Gary: I am good Dave, I’m super excited. I know that you and I were in Tulum, Mexico a couple of weeks ago, and we’ve been talking about this; I’m gonna bring you on and pick your brain for our new podcast that I just launched, the RealEstateInvestor.com Huddle.
David: Yes, I noticed the website too, man, that’s awesome! Absolutely.
Gary: Super excited about this, I’m ready to give some really good nuggets on marketing and techniques that are working today for driving more seller and buyer deal leads.
David: Hell yeah, we are ready man! I met Gary as he mentioned, a couple of weeks ago down in Mexico, we were attending a mastermind together, lots of great people, super excited about the mastermind and will definitely be going back. So much information was shared amongst the group. If you’re not in a mastermind, or you haven’t been to a mastermind, we highly encourage and recommend that you look into one or join one. The one we were at was a smaller group of about maybe 30 people. Again, we went to Mexico, so it was really neat. What I also really liked was that the spouses were invited, they were actually encouraged to come. Most of the masterminds that I’ve attending in the past aren’t like that, it’s not necessarily that they are not encouraged, but this one they were, so it was really great. I got to meet Gary and Gary’s wife, we got to go to dinner together one night, we became good friends. It was a great event, I’m happy to have gone. I feel blessed to have had the chance to have met Gary and continue our friendship.
So we have Gary on the show today. Gary is the founder of REI Vault (REIvault.com). I’ve been looking into working with Gary, I’ve been researching his company. Another one of the guys in mastermind that was down there in Mexico, a couple of them actually have taken Gary’s service, have joined and are working with Gary. Gary, you just mentioned a minute ago before we started that one of the guys you’re helping with 3 deals a week purchasing?
Gary: Yeah, Jeff Cone and Clint Bartlett, great guys. I was just interviewed on Jeff Cone-- his podcast, they are in Nebraska. Jeff Cone did over 700 transactions, he’s the number one real estate brokerage for Berkshire Hathaway in the entire country.
David: That’s awesome.
Gary: -- over 700 transactions-- Clint is the business partner that is buying houses. These guys are hitters, we’ve been working with them a fairly short period of time, and I’ve just heard from Jeff that he is actually buying three houses a week, based on our team actually driving massive amounts of direct mail, calling and screening sellers, doing cold calling and teeing him up with seller appointments, which is what REI Vault does.
David: Man, that is awesome. So Gary, let’s inform our audience a little bit about REI Vault. If you don’t mind let’s start with maybe a little bit of background: How did you start investing in Real Estate and what you were doing , and how you pivoted into REI Vault,why did you create this service? Then of course tell us all the bells and whistles and all the cool things that the service does. So investors that are listening, our audience here can understand why you have so much value to provide. Hopefully some of these people will check you out, that would be the goal here.
Gary: Yeah, that would be awesome. I’ll just really start with we’ve done more direct mail than anybody in the niche, including the real estate agent and investor niche. We’ve done over 27 million pieces of direct mail. We’re doing about a million pieces of direct mail right now for a fairly small group of people, we have about 250 top producing investors and agents across the country.
David: Man, 27 million?
Gary: We’ve actually done over 27 million, I actually thing we have probably surpassed 30 million, I haven’t looked. We do a massive amount of outbound text messaging and ringless voicemail. so as leads come in they automatically get on a long term drip for a “no seller left behind” strategy. Once the lead comes in, it should be worked forever.
David: Forever, love it.
Gary: Then there’s the integrated phone team. It’s like having the equivalent of a 40 person expert marketing and sales team for the cost of one resource. For less than $10/hr, you can have our team not only manage all of your marketing, execute the marketing better than you can do--.
David: And I struggle with that, Gary. I’m gonna interrupt. I’m always struggling with marketing. We do a ton of it, right now we’re spending between $14,000 and $17,000 a month on our marketing. That’s not a drop in the bucket by any means. I’m always trying to figure out the next thing I need to do. Being able to outsource that is huge.
Gary: Right, our time as investors, as real estate entrepreneurs, especially if we’re trying not to have a J-O-B, right? Didn’t we get into this business to actually be entrepreneurs, business owners and have the freedom of time, money and lifestyle? What happens is, most investors get stuck in quicksand where they have to feel they need to do everything. So they’re doing $5 and $10 per hour work, like finding mailing lists, cleaning up mailing lists, trying to figure out the direct mail, and setting up phone system and doing Podio this or Investor Fuse that-- guys, why wouldn’t you just tap into a team that does it?
So, let me give you a bit of the backstory. It was actually at a mastermind. I think I’m in about eight masterminds right now, but this was the collective genius.
David: Man, that is a ton of masterminds.
Gary: One little nugget for everybody, especially if you’re fairly new, don’t reinvent the wheel, number one. I’ve been doing this since 2004. Don’t reinvent the wheel. There’s nothing new under the sun in real estate. It’s go find-- like what you guys are doing here with Dave. Go find somebody that actually has already made it work and then replicate it, do it as good as them, then you can start making it better; that’s number one. Number two is join masterminds. You want to be with like minded people. I can not tell you how many-- I’ve never-- collective genius was about $20,000 a year and it was a no-brainer, the amount of-- I came up with this idea for doing it because I’m sitting there at a mastermind, there’s 100 of us talking about here’s the magic postcard, here’s the secret list, here’s the Richter list, here’s the guy to go to. And you’ve got Podio in right in your market-- it was Joe McCall who was actually the first Podio guy that was talking about Podio. I’m like, guys here’s all of us having the ideas, all non-competitive. But everybody has to go and do all the work and get it built. Why don’t we just build one shared team? We will have one team, we will get massive economies of skill, we’ll never compete, we’ll have our own community, we will share what works and what doesn’t and keep it private. So that’s how it started, it started in 2013 when I came up with the idea at Collective Genius and the rest is history. We’ve got a lot of people who are doing $1500 a month in marketing with us, and I’ve got people who are doing $35k - $50k a month. Somebody just gives us a budget and we basically will say, hey this is what we would prescribe that we know is going to work within your market. We set everything up, we execute it, we guarantee the lowest cost mail, which is fairly new. We’ve only been doing that for about two years. Because we are doing so much marketing, we get massive leverage against the data providers. I can do things that nobody could do on their own in terms of buying data. We just launched a cold calling service. So we now actually do outbound cold calling, we skip trace, we are pulling about 9 phone numbers, we actually use 3 different data providers for that, so it’s not just one, we plug into three and do outbound cold calling. Anyways, it’s been pretty cool, we have 250 people and will probably take it up to 500 people around the country, it’s mostly investors I would say, maybe 20% of our member base are realtors. How this all came together--.
David: Let’s back up a minute if you don’t mind, you said you started in ‘03 or ‘04, right?
Gary: Yeah, so my background-- I grew up in a family real estate group. My parents had Boomershine Realtors and all of us kids were forced at literally gunpoint to get into real estate-- get our real estate license. I just turned 50, so in 1987 I was still in high school, still living in California, so I was a licensed agent doing, I actually held open houses, was like door-knocking and getting listings and that’s how I paid for college. I really didn’t want to go down that path, I got a computer engineering degree, I got recruited-- there were two of us from UC Davis, a school of about 25,000. I got recruited to work at Eccenture, which is one of the top technology and management consulting firms in the world. It was awesome! I worked 90 hr weeks, I never got to see daylight. I travelled all over the world but never saw anything, that kind of thing. After five years I got recruited and I was in Silicon Valley and I did four technology start ups, one that went public right in the 2001 range, I was actually on the sale side. I moved from consulting into enterprise sales, and I did that for six years. My wife and I were so burned out, I was travelling so much that I’d come home and my dogs would bark at me, they didn’t even know who I was I was gone so much.
So in 2004 my wife and I took the plunge-- gosh I look back, in 2004 I quit-- May 17th 2004to do full time real estate. We had a two month old baby, we had four year old daughter, we had a $700,000 mortgage and both my wife and I had left our jobs, can you imagine?
David: You both did!
Gary: She was brand manager at [00:11:20.18 - inaudible]. And so anyway, gosh, that first deal I made every mistake except the negotiation, and we ended up making $181,000, it was a property down in Bakersfield. I screwed everything up except the way I bought it. I got a massive discount from the lender, it was a short sell before anybody knew what that was. I’ve done a couple- I don’t know, 400 or 500 deals, I’m in four different markets, I’m still whole selling, I do a ton of private lending and I have a team of 75 people working for me. I have a large team in India, a large team in the Philippines and people in South America, we’re all distributed. It’s fun! What I’m mostly passionate about is the community that we’ve built, where we’re able to do things that nobody else can do around marketing, and an integrated sales team. At the end of the day, as a real estate investor, we just want to be in front of qualified appointments. The money is actually making offers to sellers and most investors get so stuck trying to do everything themselves. They forget that the value of their time is worth anywhere from $250-$1000 an hour, yet they’re spending time doing $5 to $10/hr work, wondering why they’re always overwhelmed or their business is going nowhere. Hey, just tap into the best and get it done! You want appointments, then get into appointments. Don’t get stuck trying to find the magic fairy list. There is no fairy dust--.
David: Totally agree Gary, there is no magic bullet.
Gary: Marketing is an ROI, it’s a return on investment. You need to know if you’re an investor, you need to know what is my average profit per deal and what is my cost per deal. What’s the return? It’s typically-- if you’re a wholeseller, you’re on the the low side is 400%. You spend $1 on marketing, you make $4 in profit. Most people if they start getting it working as a wholeseller, it’s somewhere between $6 and $10, right? Spend a dollar make ten. I always tell everybody to be greedy before you’re cheap. You wanna be greedy for the upside, putting $200k - $400k in your bank account. Don’t be cheap on trying to save a penny here or save an hour of your time. Use other people’s money, but nobody teaches about using other people’s experience. Dave, you know this. This whole business is about leverage. It is a financial game. That’s why we make money. You also want to leverage people.
David: Absolutely. Wow I didn’t realize your team was that big, I thought about 30 or 40 but you said 75 people on the team??
Gary: It actually may be over 80 now, we’re hiring a lot, especially on the phone team. We’ve built a really good phone team. Last month we did over 314,000 outbound seller calls.
David: Hold on, I’ve got to make sure I heard that right, last month you guys did over 314,000 calls?
Gary: Here’s what’s interesting, most investors especially in this market they are like, the marketing not working, or it’s not converting very well, or the leads suck. The reality, there’s traffic and there’s conversion. Traffic is the marketing of getting the sellers to come to the drink, and conversion is getting them to close. But there is a phone interaction, it’s kissing a frog. Here’s what we’ve found, 45 leads should generate a deal. What is a lead? We look at a lead as a unique seller call, or somebody that’s coming into Podio, or somebody coming in off a website. You need 45 of those on average to close one deal. If you can close more than that, that’s fantastic. This is the average, like if you‘re not very good at sales.
David: I was going to say, if you gave me 45 leads and I only closed one, I’d be pretty pissed off at myself to be quite honest with you. My average is typically 1 in 15.
Gary: Yes, so here’s what we’re finding. Of the 45, about one third are going to be what we call net leads. Those are going to be the viable-- like 45 come in, about 15, you’re going to get a lot of people saying remove me from the list, or saying they are not interested or hanging up. But right out the gate you are going to get about 15. About half of those should be seller appointments, those should be the ones you’re getting in front of, about half of them you’ll be making an offer to, so about seven , and 1 in 7 offers should close the deal. Here’s the problem, most people aren’t doing the phone work. They’re getting the leads and saying the leads aren’t motivated. You need a dedicated phone team that’s doing nothing but outbound dialing off of a script, because 1 in 100 dials is going to generate an appointment.
David: It’s true!
Gary: Here’s the math. I will show you, for anybody that’s watching the video, I just presented this earlier for a mastermind group that I’m in. 314,000-- 31 thousand contacts, so out of 100 dials your get--.
David: It doesn’t get closer to 1% does it? Holy cow!
Gary: It’s crazy.
David: That’s exactly--.
Gary: There it is, so 10%, contact rate of 10%, that means you have to dial 100 phone numbers to get ten sellers to answer. Out of the ten sellers you are going to get 1 and a half appointments. These are qualified leads. These are sellers that have gone through a six to eight minute script. Good words. What are the bedrooms and bathrooms? When do they want to sell? What does it rent for?. What’s they least they’d take if they got an all cash offer, closed on the date of choosing? Good team doing it. The follow up-- so it’s actually 1%, 1 out of 100 calls, so the seller said hey I can’t talk right now, but can you call me tomorrow? Here’s the reality, the reality is that somebody has to be doing the dialing, and one person manually dialing can dial 100 numbers a day, and if they’re on an auto dialler it’s about 250. So that’s the missing link. In this market, somebody needs a phone team. So we just plug it in! As a real estate investor, don’t talk to the seller. Maybe take the call live, or have somebody take the call live, we have that set up for our members, taking care of that for them. And then don’t talk to a seller until it’s pre screened and qualified. For less than $4/hr somebody is plugging into our team to do that work for them. It’s like cheaper than going to the Philippines, and our team is more trained, they’re managed. Because what happens is most people, you know-- you’ve done this-- everybody is like, go get a VA in the Philippines. Well first off, hiring them is the easy, but then you have to train them, and manage them and keep them busy, that’s the hard part!
David: Gary, that is the hardest part. One of the things I just got from this mastermind that I attended with you was that it’s so hard to put dashboards together. And that’s the only way to track these people. Unless you really wanna truly micromanage, and have them use a remote PC login and you have a monitor and you’re literally watching them all day. But who wants to do that? Who wants to have that mindset of micromanaging these people? So the only way to do it really is to put together a dashboard. And yeah, Podio you can do dashboards but we’re using a new service right now called Clipfolio and it’s expensive, it costs a ton of money, a ton of time setting it up. I gotta hire developers to do it because it’s above my pay grade when it comes to all the programming and the coding. Having VA’s is a great thing, but as you said, I’m agreeing with you, it is a challenge to get these people on the team, and get them trained and keep them busy is really the big thing. Training them isn’t hard, you know you can put together videos and they can always resource that library of training videos down the road if needed. But just keeping them busy and making sure that the ROI that you’re getting from them is at a high level is difficult! I’ve been doing this full time for over three years, I hired a VA within two months of starting out, so I’ve had a VA for almost three years at this point and making sure they have enough to do, that’s probably the biggest challenge I face right now. It’s not marketing, or running leads, or getting deals or anything. It’s making sure that I have a high ROI on my VA’s. I had three, I’m down to two and ideally I’m thinking I may even have to get rid of one. I’m going to explore this today obviously, and you’ve already done a great job of explaining REI Vault. But I’m thinking maybe I get rid of one of these people, reduce my marketing and just give it to you. I’m going to leverage you, and your team and your people. And that’s awesome.
Gary: You know, it’s great, we love this by the way. The best member-- by the way we’re not a vendor, so it’s not like you can just hire us. We are super selective, it’s a membership. We want to make sure we’re bringing you in-- because you’ve got experience, that you know how to close the leads that we’re bringing you.
David: Absolutely! Because you don’t want to get people in here that are going to essentially hire you and then not be there two or three months later. Because this game is a long game, we all know that.
David: If my marketing takes four to six months to close a deal on average; of course I can go out and get a contract and have it sold four hours later, happens every week. But on average, it’s four to six months.
Gary: Yep, absolutely. So we’re looking for people that are like hey, I’ve been doing marketing, I’ve been doing this on my own, I’ve had some success, I’m ready to scale it up. I don’t wanna deal with the brain damage anymore. For $10 an hour, you’re getting a team of the equivalent of 40. Actually the whole idea came from Sean Terry. Sean’s like-- and I said, wow should I charge for this? And he goes, If you could manage all the marketing, and you could send out postcards, and you could actually get the lowest cost guarantee, and you could provide the dashboard, and you had a team that could come in and analyse the data, and say hey, here’s exactly what we think we’re gonna able to do and get for you, and here’s what we recommend for your budget. We execute that, and then we get on the phone and actually show them the results.
So we’ve got probably the best dashboard, cost per deal, profit per deal, this is what you spent this month, this is what worked, because we’re always split testing. You don’t have to manage any of that. And so, there’s a lot of back and forth. It’s an application process, we want to make sure it’s a really good fit for us, and a really good fit for our member. And then we go execute. You can scale up, you can scale down.
David: So let me ask you this, obviously this is an invite only type of thing, you guys are very selective. You don’t want the guy that’s going to try it out, that’s not good for either party, I get that. If you don’t mind explaining-- I know we are going on a little longer here but that’s fine, explain to me the on boarding process. For instance, for me. You know I do deals, vetting me isn’t going to be difficult because obviously we’re friends and you know who I am. But if you didn’t know who I am, what kind of things are you looking for to take on that customer? Because we all know, taking on customers just to make some money isn’t always a good thing. Sometimes there’s going to be the opportunity costs of time wasted and having to train and all that isn’t even worth our time.
Gary: Yes, let me walk you through it. The on boarding process, first off people will go to REIVault.com. There’s a button on the top, there’s a ton of information, we try to make it super simple. We want to provide you with as much information, exactly what you’re going to get, what it’s going to look like, what success looks like. REIVault.com is the place that you’ll go, there’s a ‘See if you qualify’, and click on that. It’s going to ask you some questions, you’re going to fill out a bit of a survey in terms of who you are, your market, do you have any experience doing direct mail, how many deals have you closed etc. You’re going to schedule a live 1 on 1 call, it’s not with somebody in the Philippines it’s actually with a gal by the name of Julia Jordan. She’s bought and sold about 250 houses herself. She’s our success manager to make sure it’s a good fit. There’s no sales, you’re not going to feel like you’re being sold anything. It’s just like, here’s how it works, here’s some more information, etc and then if there’s a fit, you sign up. Seven days is the process. From day one to day seven we’re getting everything set up. You’re going to fill out a questionnaire. We’re going to go build what we call a ‘List DNA Report’. We have two proprietary mailing lists that are incredible. One is called the ‘Invisible List’ which is mostly inherited properties. One of our members titled it “invisible” because he said, this is really invisible to my competition, the way we pull that list.
David: Gotta love that!
Gary: And then we have what we call the ‘Shipwreck List’. This is the list that’s more code violations, divorce, recently deceased and foreclosures. And then we run that to get 75%, some places 70%, combined loan to value. So we’re able to get two lists, plus maybe you’ve got the Richter list or you have your own mailing list. We’re going to put together a plan during the seven days of exactly what we would recommend in your market that’s going to get the best results. We’re going to typically come in and split test a couple of things and then we’re going to launch. Typically we drop mail either Thursday or Friday. By the way those are the two magic days, I know you do that Dave. That came up from us, because we tested every day to see what was the highest day on response rate. So anybody that’s doing Thursday and Friday, they found that out because of us. We execute it so about three to four days later, leads are coming in. They’re going right over to our phone team for phone follow up. Any hang ups, they might be getting text messages. So we set all that up, and there’s about two and a half hours of training. By the way we do set up a Podio system for you.
David: So that was my next question, I’m going to interrupt you for a second. I’m already in Podio, so for you and me to connect, get this ball rolling, cause I’m gonna hire you, I’m telling you right now, I wanna work with you. So once we hop off this podcast let’s get the ball rolling. I’m in Podio, so if I didn’t have to have a second or third CRM that would be phenomenal. So you guys can essentially plug in to what I’m already doing or using, right?
Gary: Absolutely and in fact, if you don’t already have Podio-- we are the largest Podio user in the world. Across all niches.
David: I think you told me that at dinner one night, man. That’s crazy!
Gary: A lot of the performance issues that anybody experienced over the last couple of months was because of us. We put over two million transactions through Podio. So we’re very close to their product management and their technology team, we have like 27,000 Globeyflows, 27,000!
David: Holy! Wow! I think I have about 250 and I thought I was crazy.
Gary: We’re really good at it, we provide the whole CEO deal dashboard, we actually hired somebody in Bangalore who works for Oracle who actually takes the data and we’re able to very quickly see the results, hey, here’s exactly what you mailed. A lot of feedback from some of our members and guys like Sean Terry. We build a scoreboard for you, so we also have the scorecard capability so it’s like, hey, this is how many leads should come in, this is the number of offers that you should make on a weekly and daily basis. We provide all that stuff back.
If you have your own Podio, let’s say you’ve custom built. We have this a lot. There’s some discussion that we have. One is, throw your stuff away and use the best. We already manage it for you, why are you even dinking around with Podio? Or, maybe you’re really good at Podio, and you’ve got something that works, and then we’ll just integrate the two together. Our team is probably better to do that for you. Typically the marketing, we’re going to drive the leads into our system. We have an integrated phone, you don’t have to worry about Mojo dialler. We actually have a better tool, it’s called 5-9. That’s the Ferrari, the Mojo dialler is like the tricycle.
David: I think you were telling me about that too.
Gary: I was, 5-9 is a publicly traded company, it’s more expensive. We absorb all the costs because we’ve got so many licenses, so the leads come into Podio and get pushed right over into the auto dialler. And then, like hang ups. Imagine if you’re doing direct mail. They’re going to go out into a hang up process, where they get text messaged instantaneously to the seller, then pushed over to a phone team who is going to call them and say, hey, we just missed a call from you. Were you calling about a note you received in the mail, or a property you are considering to sell? And then take them through the full script, converting those into a qualified appointment. Just like I showed you on the numbers. So that’s all integrated and you don’t have to worry about any of that. We train you on Podio so you can use it. If you’ve got your own Podio system, we can then integrate the two, which means we’ll push leads over to your system, and your system will push information back. We’ve got a lot of people that will sign up. There’s no long term commitment, you’re gonna commit to 90 days.
David: Yeah, at a minimum. I would think that would be a no-brainer.
Gary: We just started with 90 days, it’s like, hey, why don’t we run these in parallel? Why don’t we see-- some people tell us their cost per deal is $5000. I did this for Clint. And Clint was telling me that they were at like $4800 deal. And they were happy with that! I said, I think, in your market we’re gonna cut that at least in half. So the cost per deal in your market is gonna be, I think probably closer to $1200. Because we know that market. I know exactly what’s going to mail out. I know pretty darn close what the response rate is going to be. And how many of those leads are going to turn into viable leads, that are going to turn into appointments that are going to turn into contracts.
David: I love it, man. It sounds awesome; all of the above! So, at this point we’re doing everything ourselves. And I’m wearing a lot of hats! It can be very stressful. And you had mentioned it earlier, everybody gets into real estate to have FREEDOM. And what often happens is people have none of it. They jump in and they’re like, oh it’s great to be an entrepreneur, and I’m not trying to sound pessimistic or negative by any means, because you couldn’t hire me at any 9 - 5 job. It won’t happen. I would never, ever go back. However, there are those days where I’m working 12 to 14 hours, grinding, but I also enjoy what I’m doing. So my question is, whenever somebody signs up to work with you and your team at REI Vault, at REIVault.com, by the way, you guys are going to do the marketing. It sounds like you guys are doing cold calling, text messaging, maybe some RVMs, whatever it is, maybe some mailers. So, how does it work for me as the client essentially or as the investor? Am I just running appointments? Am I in charge of following up on those people after the appointments? Because essentially at that point, they now know me? Or does your team do it, or is there a mix?That’s the question I have.
Gary: Yes, that’s a great question. This is the on boarding process because everybody’s going to be a little different. I’ve got somebody who’s a full time airline pilot. They do this part time in their underwear, so they really just want to be in front of appointments. I’ve got somebody else who has a full sales time, a large sales team. Another example that’s constantly changing. I just interviewed Javier, who’s in North Carolina, Javier,I always butcher his name, Hanojo. He basically had 32 cents in his bank account at the beginning of 2018. He had to borrow money from his kids. And today we launched him, in January of 2018. He started with a couple thousand dollars marketing budget, he actually flipped some houses and in early 2018 he put $3000 into marketing. He’s currently in five markets, he’s got a massive team, five different markets, I think he said he closed 44 deals last year, these were fix and flip. And he’s upped his marketing, he’s now at $30,000 a month in marketing. So it’s changing. What he does is he comes in and he goes, you guys are the experts, tell me what to do, and then we do it for him. Everyone’s a little different. Typically what will happen is we’re going to find out about your business. You have a team, and we’re going to come in and say, here’s what we would recommend to get started. And then in 45 days, we’re going to jump on a call, we are going to do a formal account review. We’re going to basically look at the results, we’re going to look at the number of deals you’ve closed, and the ROI, and what’s working and maybe what’s not, and what we need to tweak. And then our team will go do that, and then we’ll get back on the phone again typically in another 90 days. And we proactively will reach out. If you need any help, this is really like the extension of your sales team and your marketing team. We just aren’t sitting in your office. But we become a part of your team.
Gary: You own it, it’s your marketing plan. It just happens that we’re doing it for you, and we’re going to be better at it. We’re constantly tweaking. So we have some people that have two or three people on their sales team, and they want to answer the calls live. We would recommend, hey, most of the calls will come in between 5 and 9pm, so if you don’t have somebody answering those calls live, we should forward those numbers and set up the live phone team for you. Let us to do that for you, because we’ve basically put them on the right script. Some people use Pat Live. And unless Pat Live has the right script, it can actually be garbage.
David: I totally agree, we used them in the past for a long time.
Gary: Call Porter is awesome, so we could set up Call Porter. And then let our team do all the kissing of frogs. So all the crappy leads-- by the way the people that say they’re not interested, those are awesome leads. They just take four months to age.
David: 100%. Man, I ran two appointments this morning, and in between the two appointments,I was driving from one to the next, a lady called me that I had made an offer on a house - they owed $125,000 to the bank and I offered $50,000. That was four months ago. She called me back today and said, can you send me that offer again. We’re working with the short sale person now. If we can make this work, we’ll sell it to you at that.
Gary: Let me just tell you what we do. So, click of a button in our system-- it was an offer made but it didn’t close, and so our system is going to push follow up letters, handwritten follow up letters that say, hey we recently spoke about buying your property at 123 Main Street, we’re not sure if your other options have worked out. But 8 of those are going to go out, one per month, plus text messages and ringless voicemail. And also in 30 days is going to push it back to our phone team. We’re going to get on the phone to call them and say, hey we recently sent you a follow up letter, and Dave Dodge asked for us to follow up. Have you thought any more about our offer? Have any of your other options worked out? And we work to reengage with them. Because that’s where the money is. I want to show a couple-- this is if you are following along on video, I am going to give you a couple of resources. I think this would be helpful, we did this for our members. A lot of real estate investors get stuck working on the wrong stuff.
David: I’m guilty of it! I’ll be the first to say it out loud. I’m guilty of it. I have a problem with wanting to know what’s going on with everything all the time. But it’s because I don’t have a solid team in place always. Sometimes it works, sometimes it needs help. Sometimes it needs extra work so I’m diving in. I get it.
Gary: Here’s a tool everybody, if you don’t know what your time is worth and the value of bringing in resources below you, this is the tool for you. Reivault.com/yourtimeroi. And what you do is you plug in the amount of profit that you either put into your bank account last year, or that you plan on putting into your bank account this year. And then how many hours a week do you work in this business. And that’s going to give you the value of your time. And here’s the secret, by the way, I didn’t make this up this actually came from Sean Terry and Justin Colby. If you can get somebody to do it for less than that, that’s leverage. That’s actually how you build a real business.
Let’s say $500,000 is the profit, 40 hours a week is what you worked, there’s 50 weeks, we assume people take at least two weeks of vacation, that means your time is worth $250/hr. So, we take it a step further it’s like, hey, what function are you planning on hiring and replacing yourself with? So, inside sales would be that kissing of frogs, somebody that dials relentlessly all day long. So let’s say you’re spending 12hrs a week doing nothing but that. Instead, you can go from 12 hrs to 2 hrs, assuming that maybe you’re managing somebody yourself. And you’re paying them $10 an hr to work 40 hours a week. This will say, hey you’ve just saved 500 hrs of your precious time to go do other things, raise money, or go on vacation. The profit of that resource is $105,000 over the year and your ROI on your time is 6.25, which means 625% ROI. We talk about interest rates of paying hard money or whatever, of getting 8 or 10 or 12%. This is 625%.
So that’s one, the second one that I think would be really helpful-- again we’ve built all this stuff because people asked for it,but it’s REIvault.com/brochure, you can put these into the call notes as well, Dave.
David: Yeah, this is actually really great guys: REIvault.com/brochure. Check this out, this is really cool.
Gary: So basically, you need more leads and a business that runs without you. We have the solution, the power of a 40 person team without having to hire or manage. The important thing is managing, everybody forgets that you can hire VA’s but you have to manage them. So if you scroll down there’s a funnel. And again I didn’t invent this, but if you’re going after off-market deals, which means you’re going direct to the seller, you gotta do all these things right in order to make it work. So if somebody says, oh I don’t have the right list or my leads suck the reason is, is that something in your process is not working. So here’s the funnel, first off you have to do marketing. Which is direct mail, postcards, letters, the right copy, Pay per click.
David: I gotta interrupt for a second Gary, I can’t hold back. Do you do Pay per Click for your clients as well?
Gary: We’re not, we have a strategic partner that we plug people right into.
David: Okay cool, because I have one and you know, it works, it gets leads. It’s expensive though!
Gary: It is, Pay per click has gotten extremely, extremely--.
David: I’m in a cheap ass market, I’m in St Louis, Missouri. I can’t even imagine people in San Francisco, or Miami or New Jersey.
Gary: By the way Facebook is great for buyers. I don’t know anybody in the country that’s really cracked the code on Facebook for sellers.
David: No, we tried it and it was terrible for us.
Gary: They’re not there! The houses that we’re buying are typically older sellers. We gotta get the marketing then you gotta get the fulfillment. That’s picking the mail house, the right mailing list, cleaning it up, we call it the Nasty 19, getting rid of the duplicates, it’s gotta be mail ready. Then you gotta make sure you’re doing weekly drops, every single week, because if it’s not consistent your business is going to start, stop, start, stop. Then you gotta deal with all the systems of Call rail, or Swipe Broadcast, or TLO or--.
David: I use every one of those!
Gary: Then you’ve got the inbound seller leads. So when a seller calls, those calls need to be answered live.
David: Absolutely, 100%.
Gary: But if they’re going to voicemail you need to have the right recording, or the right website. Then there’s research and comparables that needs to get done. Then you’ve got outbound, this is the missing link by the way. This is where people are probably missing the money. 80% of the profits come from between five and twelve touch points with the seller.
David: Man, I love those! The whole sales statistic chart, it’s one of my favourite diagrams.
Gary: It’s classic selling. And less than 10% of all investors follow up more than twice. And the reason is because they’re doing everything. So, most people are doing all the stuff. And this is all $10/hr. The follow up of text messaging and phone calls; doing that work is actually $100/hr work. In reality. But the $1000 or $10,000/hr work where all investors should be preciously focused on their time is being in front of sellers, making offers, building rapport, getting a yes, negotiating on price and terms, finding better buyers, raising money, building their team; their ‘A’ team. Maybe it’s sales acquisition managers or maybe going into a new market. So, this is what we plug in. And I always ask, where are you spending your time? If they spend all their time here and not having any time, we’ll plug in for $10/hr and you’re going to have us doing all of this. And the reason is, is that I have a staff of 40 but I can share that with a whole bunch of people to do it right.
David: Absolutely, I get it man. That makes perfect sense.
Gary: So hopefully those resources will be helpful for your audience.
David: Absolutely. Send those over and I will put them in the show notes. Gary, I wanna wrap this up because I don’t want to make the episode too long.However, I want to sincerely thank you A, for coming on and B, for sharing some of this awesome knowledge with our audience. If you’re interested in checking out Gary go to REIvault.com, it looks awesome. I just have one final question before we wrap this up. You’ve said your minimum for someone you would essentially want-- your minimum is is $1500/month? So this is the question I have,I’ve never been one for minimums, you know that about me. What do you recommend, somebody that’s coming to you that you know is not going to leave in three or four months, they’re going to be with you for the long haul, because they’re going to be able to leverage all of your team. What’s a good starting marketing budget? That’s a bit of a loaded question, because every city is going to be different, but what do you like to see? So that you can provide the best results? Because $1500 for some people can seem like a lot of money, but I’m spending that in three days.
Gary: Great question. So the type of people that would be really good for us then I will tell you what the budge is, are people that are ready to scale their business, their real business, not their J-O-B or the part-time-- like testing it out. If you got your toe in the water, trying to make real estate work-- make it work for yourself first and then when you’re ready to scale then come to us. We’ll make it scale for you. Our team, if you interact with us, you send us an email we are on it within 30 minutes. That’s our service level agreement. There’s a lot of moving parts and a lot of accountability to get it right. Our team likes the success and they hate it when they see somebody that doesn’t have the results. Most of the results are because they’re not making offers to the sellers.
The marketing budget is going to vary by market. If you’re in Phoenix, Dallas, Denver, California, the cost per deal is going to be higher. We’re going to tell everybody is that it’s really around your cost per deal and your profit per deal. So if you’re in St Louis, we’re going to recommend that you should be able to do a deal somewhere in between $1000 - $1500. You drop that, maybe if your sales team isn’t that good, maybe it’s about $1800 per deal. That’s going to give you enough calls to generate enough good leads. It’s going to give you enough face time to make an offer. A lot of the markets are going to be more like $2500 a month. I think the average right now for us is a $3600/month spend and I would say 20% of our member base are $20,000 and higher. And by the way if you can pause your marketing if you have too many leads.
David: If that happens to me, that’s going to be amazing!
Gary: I have Jennifer and Tyler, she was a former Dallas Cowboy cheerleader, and they actually paused it because they had too many leads!
David: I need that problem.
Gary: That’s a good problem to have. So scaling up, scaling down, we’re really helpful. We want to make sure you’re teed up to be successful, and we’re teed up to be successful. The results that we’ve had to date have been incredible. We love it when we have newer people that have closed some deals but they’re teachable and coachable and we can come in here and do amazing things. So check us out to see if there’s a fit. If there’s not, use some of our tools! We built them for our members and also as our give back to the niche.
David: Hell yeah! Before we end, Gary you also have a podcast, let’s talk about that real quick.
Gary: Yes I just launched RealEstateInvestor.com Huddle as a podcast. You can go to RealEstateInvestor.com.
David: What a great domain name, you crushed it with that one.
Gary: Yeah, so that’s the name of the business but there’s more than just REI Vault we have Attraction, Coaching programs where we’re helping doing one on one accountability coaching. We’re huge, the whole scorecard, I’ll give you one more thing reivault.com/leadcalculator, it will actually build the scorecard for you. If you have any question of what your numbers should be in your local market, you fill it out. If you wanna make a million bucks, it’ll tell you exactly what your marketing budget should be.
David: Man that is awesome, Gary thank you again so much for coming on. I know you’re going to provide tremendous value to our audience and I am ready to get going with you guys. After we hang up on this one, let's talk a little bit more about what it's going to take to get me implemented, and hopefully we can get that ball rolling today or tomorrow, soon as possible. Guys, check out REIvault.com. Gary's company is awesome. Essentially you are going to be able to leverage his team of 40-70 people, and eliminate all these other jobs. I was just saying, that I was constantly struggling with it. As a real estate investor you have to wear 20 hats. We got virtual assistants, a closing coordinator, I got buyers. I have a pretty big team, but I am still involved with every one of those processes every single day. So this is going to be a game-changer for me, Gary. I am excited. Guys, check it out, REIvault.com. We will connect with you guys next time, thanks for listening, we will see you later.