Lead Generation for Real Estate Investing

Mike: Hey, it’s Mike Hambright with FlipNerd.com. Welcome back for another exciting Expert Interview, where I interview successful real estate investing experts and entrepreneurs in our industry to help you learn and grow. Today I’m joined by Garrett Zander. He’s a real estate investor, a mentor, a coach, and he’s a fellow podcaster as well.
Like many investors, Garrett learned early on that the key to success in real estate investing actually comes down to marketing and lead generation. That’s what it’s all about. If you don’t have good marketing and you don’t have leads then you don’t have a business. That’s exactly what we’re going to talk about today, lead generation and marketing for your real estate investing business. Garrett is going to share some tips in here on how you can be more successful. Before we get started though, let’s take a moment to recognize our featured sponsors.
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Hey, Garrett. Welcome to the show.
Garrett: Hey, Mike. How are you doing?
Mike: Good. It’s kind of funny. You know I was at a meeting recently with a whole bunch of other real estate investing podcasters. Actually, we were at a separate mastermind. It just so happens that a lot of the guys that are in that group are also podcasters. I always love talking to other podcasters. We were talking about it up front how it’s always weird when you’re on the other side of the microphone, if you will, to where you don’t have to worry about the flow of it. You just kind of let the other person lead. Anyway, I’m glad you’re here.
Garrett: I’m glad to be on this side of it. Again, it is kind of nerve-racking to try to drive the conversation. I’m just going to sit back, relax, and answer questions.
Mike: Yeah, man. You can just shower us with your insights.
Garrett: That’s what I’m going to try to do.
Mike: Cool, man. Before we get started with talking about marketing and lead generation as something that is obviously critical – a lot of people understand that and some people don’t understand it, but they eventually figure it out. At least, they may not figure it out, but they figure out how important it is. Before we get started talking about that, why don’t you share your background about how you got started in real estate investing and how you got to where you are today.
Garrett: Sure, man. Like many other people, I was given a book by my dad, which was Rich Dad Poor Dad. I read that years ago. I was still in high school when I read it. It didn’t make any sense to me. In fact, I was like, “What the heck, dad? This book tells me I don’t need to go to school.” Anyways, I put it aside. Long story short, I realized I was more interested in real estate than I thought I was.
Me and my dad actually joined a Rich Dad coaching program years ago. They taught us about lease options. That was all they taught us back then. This was back in 2007 or something like that. I got a couple of lease option deals. During that time, our market, amongst many others, crashed. My option prices were no good. I had to get out of all those deals.
Anyways, being in that business, I started meeting a few people. I met a guy who was doing short sales. We ended up hooking up and started a short sale business. From the short sales, we were processing them, we starting buying them and then rehabbing them. I went right from basically creative financing right into rehabbing. I’ve been doing that now since 2008, rehabbing houses. From there I’ve transitioned into… we still rehab, but I do some more wholesaling now and also some virtual wholesaling.
Mike: Okay. Your home base though, where you started, that’s a little bit north of LA, right?
Garrett: Yeah. I’m sorry, I’m in Antelope Valley, like Palmdale, Lancaster. We’re about an hour north of LA, a smaller market. I remember, it was funny back when I was a kid. You see the weather, the temperatures for the weather. Our cities were never on there. We had to kind of figure out what our weather was going to be. Now you actually see our cities on there. We’re a little bit bigger than we were but still a small town.
Mike: Yeah. I do want to make sure after we talk about lead generation and marketing you talk a little bit about your… You started a little bit before I started in 2008. You started a little bit before I did. Just how your evolution happened, I know you were always just kind of investing in your market, rehabbing. Then you kind of worked your way into wholesaling and eventually virtual wholesaling where you’re actually doing deals in other markets across the country.
People that listen to my show religiously or often, you’ve heard that many times lately. There are lot more people that are doing that and have been enabled a lot by technology, I guess. I’d like to talk a little bit about that and how you kind of evolved. It’s just a very different mindset, saying, “I invest here. I know everything. I can go physically meet the person and drive by the house if I want to.” To, “I’m never going to see that person. I’m never going to meet that person. I’m never going to physically see the house.” It’s kind of an interesting dynamic to go from one to the other.
Garrett: Absolutely.
Mike: Talk about, I think a lot of people that ultimately have a good level of success with real estate investing, they ultimately realize they have to be a good marketer. They have to generate leads and they have to do it consistently. You have to be committed to investing money consistently or resources consistently, like clockwork, knowing that that investment may not pay off for months or sometimes years that leads some back around. Did you know that up front or was it something you kind of figured out over time?
Garrett: I kind of figured it out over time.
Mike: I guess if you started doing short sales and stuff like that, you weren’t really marketing direct to seller at that point, probably.
Garrett: Actually, oddly enough, the guy I worked with, maybe he knew from somebody else. I don’t know. We would get our NOD list and ultimately would try to get direct to seller. That was the goal way back even then.
Mike: Okay. Talk about that. I think that’s something that – a lot of people into real estate investing and they assume, “I can just go find deals.” It sounds easier than it is before you start doing it. A lot of the difficulty comes down to consistent lead generation. Talk about your evolution of when you realized that you had to become a good marketer and the steps you took to improve.
Garrett: After the 2008, 2009, 2010 when short sales dried up, they’ll always be around, we actually had a really dry spell because we stopped marketing because there weren’t 100 NODs a day. That was when we realized that it seemed so obvious. Wow. We were sending letters to these people, getting leads, meeting them, and then turning them into deals. We needed to figure out then who we wanted to target.
It was around the time that short sales started to dry up that we thought, “We need a new motivation.” It was kind of like a duh moment. Yeah, figure out what that motivation is and send the same letter to them and get your phone ringing again. What happened was in 2010, we were actually at the auctions. We were buying a lot of properties at the trustee sale auction. We stopped trying to stop the auctions, and now we’re actually there buying them.
In that time frame, if we weren’t buying at the auction, we had nothing going on. We realized we needed to fill the pipeline. How do you fill the pipeline? Go back to your marketing, your letters and bandit signs.
Mike: Yeah. For those who don’t know, tell us what NOD is.
Garrett: An NOD is a notice of default. In my market, it’s when someone is three months behind on their payments. A bank files a notice of default saying basically you’ve got to make this payment now or we’re going to take your house in foreclosure.
Mike: Yeah. Those generally get posted in the public records where you can either buy lists or go pull information yourself. Then you realize, “Hey, maybe that’s somebody I could market to.”
Garrett: Yeah. It’s a public record out here. You could go get it yourself, but what’s still kind of hard in California – not hard, but it was a pain in the ass to get it in California. To buy from a list source was a lot easier.
Mike: Yeah. I know that you mentor and coach some people, and you’ve been around long enough to where… I tell people all the time. When you start to teach other people how to achieve some level of success or be successful as a real estate investor, it turns out probably the best lessons are the things you teach them not to do from things you learn not to do along the way. For a lot of new real estate investors, maybe you could share some info on how to think about generating leads or what some of the different options are as to where they should get started.
Garrett: Yeah. A lot of people that come to me, that’s their biggest complaint. I get it. I get that lead generation is definitely frustrating for some people, especially if you don’t know what you’re doing. It doesn’t have to just be a buy list and then send letters to this list. There are other things you can do too. That’s what I like to teach people a lot. I explain to them you’re not a ninja. That’s kind of the theme of the show right now.
You’re not a ninja in this business. You need to let people know what you do. The more people you tell what you do, the more chances you have of somebody saying, “You know what? I do want to sell my house right now.” Somebody wants to sell their house, etc.
I’ve actually had a student who is in great business for this. He has a job. He’s a mover. I was like, “Man, every house you go to, find out why they’re moving. Are they renters? Are they moving out because they got a new place to rent? If they are, find the landlord.” I realized that you can’t be a ninja. You’ve got to tell people what you do in this business. The more people you tell, the more chances you have of finding somebody.
Mike: Yeah. I’ve talked about this a few times lately. A lot of people don’t realize that. Even for veteran people, it’s still hard to make that commitment to network with people. It’s not like if you go to a real estate club or some sort of networking event or you just meet somebody wherever, it’s almost never going to happen that you say, “Hi, I’m Mike. I’m a real estate investor and I buy houses.” They say, “Guess what? Actually, it’s your lucky day. I have a house for sale. Here’s a contract. Let’s write it up right now.” That just doesn’t happen.
What’s more typical is you meet that person. You have to find some way to build that relationship over time where you at least stay in regular contact, otherwise you’re not going to be top of mind when they do come across a deal. Months or years from now, you get that deal.
I’ve shared this story with a few people before that I was at an HOA meeting at the last house where my wife and I lived, totally randomly. I had a logo shirt on. They were like, “You buy houses?” I was like, “Yeah.” They were like, “My grandmother passed away four years ago. The house has just been sitting there. Would you be interested in looking at it?” “Yeah. How fast can we go?” We bought the house.
That was a random one that was much quicker, but the second part of that story is… and I will say this is one of my “do what I say, not what I do” because I really didn’t do a very good job at following up with them. I guess maybe this is a lesson that I’ve never really heard anybody say before is following up with sellers. You just generally don’t think, “I’m going to buy another house from the same seller.”
In fact, this woman contacted us two years later and her sister had passed away. She said, “I just wanted to see if you’d be interested in buying her house.” How many people out there that are listening to this, ask yourself this question, have bought a house from somebody, do you follow up with the seller just in case, “Hey, if you happen to know anybody, we can help.” Or if they might be in the same situation, “We’re here for you.”
You have to do it tactfully, but be able to follow up over time. I don’t know very many people who are doing that. It’s a really small opportunity on the grand scheme of things, but a house or two here or there can make or break most investors. I think it’s just that large portions of time can go by from somebody you met. As long as you can stay top of mind, you might get some deals from them.
Garrett: Yeah. That’s interesting actually. I’m thinking back on a few of the short sales. We had one seller who we bought a house from. It was a short sale. He owned this other house at the time. That’s why he sold the one. He contacted me years later via email, an email address I checked maybe once a couple of weeks just to check. He was ready to sell the house he was currently living in. That’s the only time that’s ever happened. Even then, until you said this right now, I’ve never thought about staying in contact with other sellers. That’s a really interesting point and it’s kind of a ninja type tactic.
Mike: I lucked into that one. I was not using ninja tactics. That one snuck up on me. When things like that happen, it makes you think. For years, I could have been following up with all these people and I never did. We’ve had people who’ve called in before saying, “Yeah, we sold our mom’s house to you a couple of years ago. Now my dad passed away too.” Things like that happen. I think this is a little bit outside of lead generation, but if you treat people right and they had a good experience with you, then that karma comes back around to you too.
Garrett: I agree. In 2008 and 2009, it was really, hugely important to be tactful and to be not just nice but understanding. Back then, foreclosure was new to people. It was scary to people back then. Now people think about foreclosure like, “I’ll stay in my house for a year and not pay the bank.” Back then, people were worried that someone was going to come and change their locks while we were there. You learned a lot back then of how important it was to build rapport and get people to trust you and know that you’re there to help them. If you were genuinely there to help them, good things could happen.
Mike: Yeah. Talk about, for a lot of real estate investors, I think one of the things that people struggle with is a lot of newer real estate investors especially, and even some veteran folks, they start by trying to do everything themselves. That can be a daunting task. It’s like, “Yeah, I know I’m a real estate investor, but I have to be basically running a mini advertising agency too? I need to be good at that too?” I don’t even know exactly what you do, but talk about how people can outsource some portions of that so that it gets done consistently and they don’t necessarily have to do all the legwork themselves.
Garrett: Yeah. Today, there are a lot of ways to help you track that. That’s really important, obviously – tracking your leads and your marketing. Podio is a big one. I learned all my Podio stuff from Joe McCall. I don’t even use it as well as I should. I really wish I did. I think when you first get started, it’s okay to be everything. You can be the one that writes the letters. You can be the one that seals the envelopes and all that stuff.
Eventually we started having somebody, we actually had a human being write our letters for us. She would just like standards at school, just wrote letter after letter without even having the names. What we had her do was just get a pad of paper and write the exact same letter with “Dear” and leave that part blank. When we got the list, she would just go and put the name in there and fill the envelope out.
Today, you can use Click2Mail or YellowLetters.com. There are so many ways now where you don’t have to be the person doing it all. You can pay these websites to generate these letters or postcards for you and send them out for you. You just have to track them. Ultimately, to me it’s about the tracking that’s most important. That’s where Podio really comes into play.
Mike: Yeah. You’re saying tracking for the purposes of knowing what works and what doesn’t, what your cost per lead is or cost per acquisition to see whether that’s your best place to spend your money or not?
Garrett: Yeah, and not necessarily just that. That’s obviously important. You want to know your money is working. Tracking for follow-up, we didn’t really talk about that. Follow-up is key. You can’t send one letter to somebody and hope they call you back. That was something I had to learn the hard way when I realized how important marketing was.
Again, I sound like an old-timer now, but back in the short sale days, you could send one letter to this person when their NOD was filed. They were scared back then. If they got your letter, they called you off of one time. If they didn’t call you off of one letter, you moved on because there were 100 more people tomorrow in the same situation.
The point is, I learned when you get to other type of motivations like absentee owners or a vacant house, which is obviously absentee owners, they get one letter from you and they’re like, “Eh.” After two, three, or four letters, now all of a sudden they’re like, “Maybe I should call this guy.” I guess what I mean by tracking is I’ve learned you have to know who you’re sending letters to and when you send them so you can send a follow-up letter to them or a follow-up whatever to them.
Mike: Yeah. Maybe you could share. I know you started off as primarily a rehabber and didn’t quite even understand the wholesaling piece. We had somebody else on the show recently, I think, that talked about how the best wholesalers are good at rehabbing. Rehabbing is kind of fundamental – knowing what it’s going to cost you to do something and really understanding it. People are just like, “I wholesale houses. I estimate the rehab is 10 bucks a square foot.” You’ve never been there and you don’t even know what it needs, so that’s probably not a good estimate.
That’s kind of the foundation of really understanding how to sell a property is really knowing what has to go into it. You kind of evolved from rehabber to a wholesaler and then started to do some virtual stuff. Maybe share that story, how you evolved, and why you evolved.
Garrett: Rehabbing is kind of a pain. Even though I’ve been doing it for a while now, I hate to say it this way, but back when we started this we never had plans to systematize it or to build a business out of it. We just wanted to make $30,000 every time we sold a house. You know what I mean? That was the plan. I was kind of young too. I was 25 or something like that at the time. You just want to make a bunch of money selling houses. It wasn’t a business.
It obviously became one. I’m still doing it. With that being said, for years I continued to do everything, lead generation, meeting sellers, I walked the properties, I did the scope of work, I met the workers there, and then I managed the property. Eventually I kind of got burned out. The biggest burnout was dealing with the workers.
Unfortunately it’s a tough thing. They want to make as much money as they can and you want to spend as little as you can. You go through a lot of people. I’ve never had a worker work for me for more than four or five houses. It gets to become kind of a pain. I don’t mean to scare anybody away from this. There are people like Justin Williams, for instance. I would love to continue to learn from that guy and how he systematized rehabbing. To me, it’s an amazing process.
The point is, I became kind of burned out on it. Over that time, I started listening to a lot more podcasts. Wholesaling became a normal thing to me. I knew what it was and I knew how people were buying and selling houses without their own money. As some leads started to come in, I literally picked and choose. I was like, “I don’t feel like messing with this one. The profit margin isn’t enough to make it worth my time anymore.”
I started wholesaling them. I don’t want to sound weird, but I just started getting rid of them and making some money doing that. I didn’t care if I was making $1000. It didn’t cost me $1000 to generate that lead, so that was good. That’s great. It was the realization you could monetize almost every lead. Of course, that’s crazy, but you can monetize a lot more leads by being able to wholesale them.
Again, when you’re rehabbing and you’re borrowing money or whatever to have the money for rehabbing, you do run out of money eventually. You’re tied up eventually. We would have some leads back in 2011 and 2012 come in where we couldn’t really do anything about it so we just kind of let it go. That’s when I was like, “Wait a minute. That doesn’t make sense.” It was a combination of realizing that you need to figure out a way to monetize as many leads as possible and me being kind of burned out.
Mike: Yeah. I understand that. I know a lot of people that were large rehabbers. Something just happens one day and they’re like, “I’m going to wholesale everything. I need a break.” There are a lot of legitimate reasons why you want to have multiple exit strategies.
You could run out of capital. You could be rehabbing a bunch of houses and you’re just tapped out. Or capacity issues, you just can’t get to them all. Or it could be that it’s just too far away or in a part of town you don’t really want to rehab. It could be in the hood. There is someone for that house, it just might not be you. There are a lot of legitimate reasons why you would do that. Talk about how you got into more virtual wholesaling, which allowed you to start buying houses in other markets outside of your own.
Garrett: Yeah. I realized wholesaling was so much easier than rehabbing. It still has issues. It’s not easy, but it was easier than rehabbing as far as the amount of work I had to do. I hooked up with a guy who was generating leads with a website nationwide. He was an SEO guy, so he had leads coming in all over the place. He was like, “Hey, look. Do you want to work these leads?” I was like, “Sure. Let’s see what happens.” This was actually just last year, 2014. I said, “Sure, let’s go for it.”
I started calling people in Tennessee, New Jersey, Alabama. I just called them. I was going to figure it out. As I started to figure out what I was going to do when they said they wanted to sell and it started to work, I realized I was doing even less work than I was doing with the local wholesaling deal. I was getting more excited. Like I said, I guess I’m kind of becoming and old-time lazy guy. The easier it is, the more I want to focus on that. Not the easiest, but the less work I had to do, that’s what I want to focus on.
Mike: Yeah. I think a lot of real estate investors, you go through phases in your life. You’ve got family and different things. You’re like, “Is there an easier way?” It’s not just real estate investors. It’s all entrepreneurs. Even if your business is doing really well, you just kind of get tired. You’re like, “How do I now work this hard forever?” Or, it’s not working at all and you’re like, “This isn’t going to work. What do I have to do differently?” It’s like evolution. You’ve got to figure out how to change.
Garrett: Yeah. Todd Toback has a great example of that. He was doing a lot of big business, making $200,000 a year. He woke up and he was like, “I hate this.” He’s obviously become a big systems guy in building a business. Building the business side of it is all kind of a new thing for me for the past year and a half with real estate.
Like I said, it really was about I was just going to flip houses and make a bunch of money and then eventually buy an apartment building that had cash flow with this much money every month, but I would never do this again. Again, evolution like you said. To really make a house flipping business, you have to treat it like a business. That’s the transition right now.
Mike: Yeah. Awesome. We have just a couple minutes left here. Garrett, why don’t you tell us, maybe give some kind of advice to people from a marketing and lead generation standpoint, what’s the mindset they should have if they’re early on in their career or maybe even new and they’re looking to try to get started. How should they think about going into this?
Garrett: I think you have to be consistent and persistent. Also, I’d like to tell a lot of my new students who are really new to this, don’t be afraid to send out maybe 20 letters a week. You don’t have to be like the Shawn Terrys who are sending out a thousand letters a month, or who knows what he’s doing these days. You can send out 20 letters a week and eventually get things building up there. It’s better to do something than nothing.
Mike: That’s a good tip.
Garrett: And then stay consistent. I had a podcast guy that I interviewed. He said if he had $1000 for a marketing campaign, he would rather take that $1000 and use it for a campaign over the course of three months for the same list as opposed to just throwing $1000 at one list and then never going back to that list. Going back to the whole follow-up, if you have a list or whatever and you’re sending 25 out a week, just make sure that the following month you send to that same 25 again.
Mike: Right.
Garrett: Sorry, I kind of went all over the place there. I didn’t mean to.
Mike: That makes sense. Consistency is key and hearing that consistent message. People get it. You should get it. If you get a bunch of mail at your house that you just throw in the trash, you should get that a lot of people are not even going to see your message. It’s just a noisy world from an advertising standpoint. You’ve got to hit people over and over again to be consistent.
Garrett: Exactly.
Mike: Garrett, really fast, one more thing – tell us about your podcast.
Garrett: I’m the host of the Real Estate Strategy Lab podcast. I took that over from Jeff Koga. We’re still involved in it together with Jeff Koga. I do very similar podcasts. I find people that are either a local expert or big names. I’ve interviewed Todd Toback and Justin Williams and whatnot. Anyways, go to RealEstateStrategyLab.com. I took over around episode 32. The episodes before are also great. Yeah, RealEstateStrategyLab.com.
Mike: Awesome. We’ll add a link down below the video here.
Garrett: Great.
Mike: Garrett, thanks so much for joining today. I appreciate your time, my friend.
Garrett: I really appreciate it. It was a lot of fun being on this side of it. Thank you so much.
Mike: Awesome. Take care and stay in touch please.
Garrett: Okay Mike. Thank you.
Mike: We’ll see you.
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