This is episode #349, and Damon Remy of REI Blackbook is today’s guest. Today we talk about a subject that is near and dear to my heart…lead generation and lead management.
I’ve said it many times before….if you don’t have leads, you don’t have a business. And if you don’t manage your leads effectively, you won’t have a business for long!
You can’t discuss this topic enough, as without leads, you don’t get opportunities to talk to sellers, don’t get opportunities to make offers on houses…and therefore…don’t do profitable deals.
It’s an important topic…please help me welcome Damon Remy to the show!
Mike: This is the flipnerd.com “Expert Real Estate Investing Show,” the show for real estate investors, whether you’re a veteran or brand new. I’m your host, Mike Hambright, and each week I bring you a new expert guest that will share their knowledge and lessons with you. If you’re excited about real estate investing, believe in personal responsibility and taking control of your life and financial destiny, you’re in the right place.
This is episode number 349 and Damon Remy of REI BlackBook is today’s guest. Today, we talk about a subject that is near and dear to my heart and it should be to yours, lead generation and lead management. I’ve said it many times before. If you don’t have leads, you don’t have a business. And if you don’t manage your leads effectively, well, you’re not going to have a business for long. So you can’t discuss this topic enough as without leads, you don’t get opportunities to talk to sellers, you don’t get opportunities to make offers and houses and, therefore, you don’t get to do deals or generate any profit for your business. So this is critical as a real estate investor. It’s an important topic. Please help me welcome Damon Remy to the show.
Damon, welcome to the show, my friend.
Damon: Thanks for having me, man. Totally appreciate it and excited to be able to share with all your listeners and followers today.
Mike: Yeah, you’ve got a lot of knowledge and I’m glad you’re going to share with us today. So, everybody, we’re going to talk about lead generation today and lead management. And management is really critical of your leads because that’s our gold so a lot of people that are running around with a legal pad and manila folders and you’ve got a stack of stuff somewhere. You are not managing your resources effectively. Post-It notes. I’m not even going to show you my desk. I don’t have leads but I’ve got all sorts of notes to myself. I’m not even going to go there. But this is a really important topic today. Before we get started, though, Damon has a ton of great experience and I want to, for those of you that don’t know him, he’s the CEO of REI BlackBook but I want him to introduce himself a little bit and give your background. So, Damon, tell us who you are, man.
Damon: Yeah, man. It’s always the worst part of these interviews, by the way, is talking about yourself so the short story is I really got started in the technology space in the military. So I actually served four years in Marine Corps, joined the Marine Corps straight out of high school. Actually, I had my mom signed the paperwork when I was around 17 to go in. But I got very lucky and very fortunate in the military that I got thrown into a technology job role. And although I wasn’t really exposed to technology much whenever I was a kid, just quickly found that, man, I really, really, truly love the technology piece.
You fast forward a little bit, I actually got out of the Marine Corps and ended up in St. Louis, Missouri and was working in the mortgage business back in the heyday. So I am a recovering mortgage broker. It was good while it lasted, but it ended up a tough time about 2008, 2009. Life changed quite a bit. But really applied all the technology stuff actually into really the mortgage side of things and not just technology but the marketing skill set as well. So really, I think probably the two biggest skill sets I bring to the table are marketing and technology and I kind of married those two if you will, which is going to be super important for lead generation and management, right? But I did specifically in the mortgage business and we catered to real estate investors. That was our niche. That’s what we focused on.
And early on, I would say probably about 2004, 2005 the market’s hot, everything is really going well, but even on the mortgage side, rates are low, business is booming, and we focused on the real estate investor space. But we said, “Hey, you know what, if we can actually help them do, A, do more deals and do them faster, then they need more money, they would come back to us more frequently.” And so we actually just started building just different tech tools.
It started with some Craigslist posters, and then we started with websites and we just started doing different tool sets if you will. And we actually gave them all away for free. So if you’re in St. Louis, you probably remember the hay day of us just giving away all of our tools for free. And the whole goal and principle were you’re going to come back to us for the financing, right? If we can help you do more deals and do them faster, then you’re going to need more money more frequently.
And that formula worked very, very well up until about 2008 and the whole market dried up, liquidity, all the banks. Really, the banks actually came in and started saying, “Hey, look. We’ve got to look at all of the different loans that we’re doing, the different risk profiles.” And all the non-owner-occupied loans, the real estate investor loans that we were doing were pretty much the first loans on the chopping block. So we went from doing 100-plus loans a month to, like, 10. And, unfortunately, your income is also proportionate to that cut. It was a pretty dramatic time, 2008, it was a little rough.
Now, the interesting piece at that point in time, though, was we kind of step back and we looked at it and said, “The reality is that this is actually we saw all the foreclosures starting to spike and everything else, look, real estate investors aren’t going to get out of the game just because banks conventional banks aren’t going to necessarily give them the financing.” And so you started seeing a lot more private money, a lot of hard money lenders start being propping up all these institutional lenders.
So we knew real estate investors weren’t going to quit and we kind of stepped back and took a look at some of the tools that we had traded over the years and said, “Man, we know they’re helping real estate investors, they’re doing more deals, they’re generating more leads, they’re able to manage their leads better, what if we actually packaged these up and turn it into a software subscription platform?” And that’s really what we did. We took our first paying customer in 2009 and that’s really what jumpstarted the entire REI BlackBook existence, if you will.
Mike: Yeah, that’s awesome. Thanks for sharing that story. Yeah, I was doing a live presentation yesterday and I was talking about how before I got into real estate investing, I was in the retail space, but I worked for a startup that uses a lot of technology. I mean, it was a high tech startup online retailer, but they are really tech savvy. And then when I came into real . . . And I wasn’t an engineer. I mean, I wasn’t a programmer or anything but I was around it enough to know the importance of technology since back in mid-2000’s. And when I got into the real estate space, it’s like the cave man era, right? At that time, there was very little technology.
There weren’t really any CRMs. People were using High Rise or Zoho where they were just finding stuff that they could kind of piece something together, right? But there wasn’t a lot of technology. It’s just like those worlds hadn’t collided yet of technology and real estate investing and it’s been really a dramatic change over the last almost 10 years, right? Especially like four or five, I think, when a lot of institutional players got in. Everybody had to up their game, right?
Damon: Yup, no. I 100% agree I went through that in the mortgage space so similar to you I went through that in the mortgage space where, in 2004, the first mortgage company I actually really went to work for, they didn’t even have email. So I introduced email to them. I mean, they were literally still doing the fax rate sheets everyday and so we really kind of revolutionize some of the stuff they were doing, which is awesome and then just said even in our customers in the real estate investing space again, it was a huge hole and even then and still to a big degree today, technology is definitely playing a huge part in the real estate investing space.
But especially for the new investor, the folks out there that are just getting started, it’s still a little bit of the wild, wild west with all of these crazy different options available, what should they really be using. And then not only that, but it’s like you’ve got all these different tools. I mean, it really creates what I always call “multiple system chaos.” The next thing you’ve got to have a website, you’ve got to have a CRM, the next thing you know, they started talking about landing pages and autoresponders and text messaging and all the stuff. And you’re like, “How do I even, how do I solve that? How do I conquer that?” And unfortunately, most of us still rely on the old Post-It note and sticky notes. It’s the sticky note chaos. I mean, that is not a good lead generation model. I promise you. If you’ve got sticky notes everywhere, then you’ve got a problem.
Mike: Yeah, absolutely. Well, let’s dive in. Let’s talk about today, you’re going to share your five pillars of
what do you call this? Five pillars of success.
Damon: Exactly, it’s really five pillars of success and although we’re talking about real estate investing today, this is really five pillars of almost any business realistically. But really in the context of real estate investing what do these five pillars look like? So I’ll cover that in detail and we’ll talk a lot about because the first pillar really is the lead generation and the marketing, which I know that’s . . . we just talked it and you’ve got cool themes going on and I know that your theme is lead generation. And that’s my favorite thing to do, actually, so I love the marketing and lead generation. And then we’ll talk about that as well.
So the five pillars, we really kind of just break that down pretty easily. The first pillar is marketing, right? So that is guys, to even be in the game, you have to be able to market. And, unfortunately, a lot of folks are doing the marketing wrong because there’s just total . . . it’s the wrong focus. And whenever I talked about marketing, I really talk about the focus of your marketing. And most small businesses, most realtors, most real estate investors, they’re putting the focus on them themselves, right? And they want to get their name out there, they want to get their brand out there, they want top of mind awareness. All of these terms that these big marketing and PR companies have kind of brainwashed us over the years to think are super, super important.
And it’s easy for them to sell us on that and convince us of that because we look at this big, big companies like McDonald’s or Target or all these big, big brands and that’s what they are really focused on. They’re really focused heavily on that brand marketing. But it’s just not fair for you as a real estate investor, small business guy just getting started to start trying to compare and compare yourself to those big, big brands. I mean, the reality is you’re not going to build . . . it’s difficult and expensive to build a brand and most folks probably listening to this call probably don’t even have a marketing budget, one. That’s a big problem in and of itself. So they don’t have a marketing budget defined. But two, they probably couldn’t afford to compete to build a brand, right?
So instead, what we do is we really want to talk about on your lead generation a big shift of focus, as opposed to brand, you really want to shift that focus to people with problems and really solving their problems. And I do a lot of live presentations and demonstrations and stuff, and one of the things I always do and it’s always really effective and I kind of do it for laughs, but the reality is whenever I do this, people kind of step back and they realize, “Oh, damn, that’s true.”
Because I actually ask everybody typically it’s like, “How many of you guys right now listening to this are actually stuck because you don’t know which color of blue to use for your logo or you don’t have the perfect logo or the perfect company name?” And so you’re just stuck in that component, right? And what we do is we want to actually get you out . . . First of all, I want to get you out of that mindset and realize that the logo is not going to make or break your business. I mean, don’t get me wrong. Cool logos are great. But it’s by far . . . you don’t need a logo to do deals. I mean, that’s the reality of it.
Mike: Don’t let that prevent you from getting started, yeah.
Damon: Yeah, 100%. And so I always kind of put people . . . and I ask them a simple question like, “I want you to put yourself, which is a good marketing technique, to actually put yourself in your target’s shoes, right?” So I want you to put yourself in your target’s shoes. And let’s just say you’re going after somebody you’re really focused on foreclosures, pre-foreclosures, and so now, think about it.
I want you to put yourself . . . where would you be at emotionally if you were behind on payments? Sitting there, you lost your job, you’re two months behind on payments, you know they’re going to be coming to foreclose soon, you’re not going to be able to catch up, you’re just absolutely behind, you don’t have a job. You don’t even know how you’re going to feed your kids much less make your house payment. You’re stressed about where you’re going to live next. All of those things and I want you to put yourself in those.
So you can actually feel and go through that emotional state of what your prospect is feeling and then I want you to think about it whenever they get that mailer and if it’s a direct mail piece, a postcard, yellow letter, whatever the mailer is that basically says that you’re going to solve their problem, right? And their problem is they got this house, this whole big burden around their neck, and you’re going to solve that problem for them. But they look at the logo and say, “Oh, you know what, that’s the wrong color of blue. I’m not going to call these guys.” It’s ridiculous that . . . once you start really putting yourself in their shoes and start thinking about that prospect and going through those motions and understanding their emotions, then I think you guys will quickly realize that some of the things you may be putting emphasis on in your marketing is not as important and not as much of a priority, you know?
Mike: Yeah, I think the importance is that you know that you can change those things. If you go back and look at most . . . so a couple things here, if you look at most major companies, their logo is usually text-based, right? You think of GE, Microsoft, Google. Google is, the word “Google” with some color to it, right? They don’t have, you know . . . I think sometimes we want to have this ridiculous graphic designer create . . . it’s not like it’s a tattoo that you live with on your body forever. It can change, right?
Mike: So keep it simple. And again, if you go back and look at lots of major companies, their logo has changed many times over the years. You can have iterations of it so just start with something simple don’t get too creative. But most importantly, don’t let it slow you down from getting started because at the end of the day, what’s more important is that you’re hitting people with a direct response message of some sort so they can contact you and you’re not fooling around with a logo or something like that, right?
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. . . with a direct response message of some sort so they can contact you and you’re not fooling around with a logo or something like that, right?
Damon: Yeah, and there are a lot of reasons we get caught up in that. I mean, it’s interesting sometimes and I still get caught up in this stuff. We feel like we’re productive because we’re going through the motions of maybe trying to create our logo and you’re getting stuff done, but you’re really avoiding talking to people at the end of the day, right? A lot of folks are doing everything they possibly can to avoid that interaction and actually start having conversations.
And so another important piece, so that’s what you talk about is the wrong focus. It’s not focusing on you, your company, your brand, your logo, the focus certainly shouldn’t be on there. It should absolutely be focused on people with problems. And as long as we’re talking about, that’s another important piece. It’s not just the same old generic message, right? I mean, it’s not just one blanket message to every potential target. You really do need to pick a specific target and, Mike, you mentioned direct response. I mean, that’s the key for most real estate investors is to understand direct response marketing. When we talk about marketing in lead generation, it really is about direct response. And there are some fundamental principles of direct response. And part of it is understanding the audience, right? But you’ve got to pick that audience.
Now, typically, when REI actually talk to folks about this, they get a little bit leery to say, “I don’t want to just focus on folks that probate, you know folks that have inherited their properties because that’s such a small niche and there’s so much more out there and I don’t want to miss out on everything else.” And so the important piece to understand is you want to focus and pick a particular small niche like the probate, okay? That’s a perfect example and we can kind of dive into that, but that doesn’t mean that you can’t create other marketing funnels for the other opportunities and the other niches, right?
So the first thing I always tell anybody to do and the real estate investing space, especially if you’re just getting started on anything else, is like, “Alright, just sit down on a piece of paper and write down every target market that you could possibly really want to go after, right?” And that’s going to help you get over that feeling of, “Man, I’m missing out. I’m not going to be able . . . What happens to the folks that are behind on payments? I want to go after those folks.” Okay, perfect. But it’s a different message from somebody that inherited their house. They inherited their problem, really, is with the inherited, most of the time, okay? As opposed to somebody that’s behind on payments. That is two different direct response messages even though the solution to their individual problems are, “Hey, you’re going to come in and buy their house,” the communication and the conversations to get that dialog started are different, right?
Mike: That’s a different segment. You don’t want to seem too generic, right?
Damon: Yeah, 100%. So once you actually realized and you say, “Okay, hey look, you’ve got to figure out the right target, okay?” And it’s not about you, it’s about them. Now, you’re focused on their problem. And now, you’ve got figure out, okay, there are different problems for different segments and so there are multiple different segments of sellers, there are different segments for buyers. I mean, there are lots of different segments in those high-level categories we’ve got to drill down even deeper.
Once you actually do that, then we really kind of start getting into pillar number two, which pillar number two is follow-up. And the money really is in the follow-up. And I got to tell you that, statistically speaking, this is where 92% of real estate investors fail, okay? They fail miserably at the follow-up. And I hear it all the time. I mean, people come to me and say, “Damon, I need to generate more leads. I need to generate more leads, more leads, more leads, more leads.” And more leads aren’t always the solution. Sometimes, the solution is just following up better with your existing lead flow. So more leads is typically going to mean more investing, more money it’s going to be more out of pocket, as opposed to if I could just follow up better what could that look like, right?
Now, there are a couple of key elements in the follow-up. Now, first and foremost, this is an extremely important . . . this is really where technology starts to help and can play a huge role so that you have systems in place to autoresponders and follow-up plans task management triggering you when to make the phone call because, in step one, we identified all these different target niches, right?
And you’re going to have different follow-up messages for each one of those segments as well, right? So your follow-up plan for a probate lead is going to be different than it is for a foreclosure lead. So you need to have systems in place to be able to manage all of those things effectively. And another key to that is how many touches and how long it takes to buy. So, Mike, I’d be interested to ask you a question. What’s the longest somebody has been in your queue for a deal that you’ve done? From initial contact to when you closed the deal.
Mike: I actually just was talking to I did a Facebook Live thing yesterday and was talking about lead generation, the importance of follow-up and things just coincidentally. And I mentioned yesterday that we bought a house, this was last year, but we bought a house 54 months after we made our first offer and our process is we follow up generally, you know . . . early on stuff might be more frequently than once a month, if it’s in play we call them maybe daily or every couple of days then it starts to trail off and for us, it typically always ends up in an every-30-day type bucket. And so what we had . . . whenever we buy houses especially when they’re long, I go back and look at the history because I just like to see the notes, you know. Because we have VAs that most of our follow up and we don’t even stop following up if the number is disconnected because the chances are on the next month, that’s going to be reconnected again.
Damon: Reconnected absolutely, that’s correct.
Mike: Essentially, 50 four and a half years of follow-up roughly every 30 days and there were messages, “Called, left voice mail. Called, left voice mail. Called, left voice mail,” because that’s mostly what happens. I mean, somebody like me, I would give up. I know the importance of follow-up so I have my team. That’s their job is to continue to follow up. Even if I can’t believe I’ll be leaving another message, I can’t believe I’m going to call this number again. But it was literally, they would say, “Well, we decided just to keep it,” but they didn’t tell us to stop calling so we didn’t stop calling. Or at one point, they said, “Well, we decided to put a tenant in there, now where just going to fix it up ourselves.” Everything that happened that you can imagine over four and a half years. And then after, essentially, 54 months, we called them, they answered, and they said, “Is that offer still good?”
Damon: Imagine that.
Mike: Yeah, it’s crazy. But you’re right. The answer is not necessarily more leads. It’s to work the leads you have harder. I would also add that our type of seller is somebody that probably should have called us years ago so there’s naturally a bunch of drag your feet and delay the decision and stuff like that. So it’s not like I’m hungry right now and I’m going to eat something right now and if you don’t get to me by 1 PM, then don’t market to me anymore because I’ve already found a solution. Our people have a long sale cycle, right? They’re going to delay this for as long as they can, probably.
Damon: Yeah, 100%. And the nail on the head right there is I love that because that is so true. The reality is it can obviously be varying depending upon what niche you’re going after. And if you’re going after folks that are behind on payments and in foreclosure and in distress and all those types of situations, they’re typically in those situations for a reason, right? I mean, they’re not quick to act and things like that. I can tell you across the thousands of real estate investors that we serve and use our tools and products we survey them and we can see that about 20% of transactions take place after 12 months from the initial contact, right? And that’s really important to understand is that follow-up piece.
Now, the other big question I would have is, obviously, you’ve got systems in place. You’ve got VAs kind of handling those follow-up phone calls, but how long is it really taking them to pick up the phone and leave a message and just touch them on a monthly basis and what kind of expense is that really once you actually are really working those leads, you know? Especially for the return that you’re getting.
Mike: Not much when you consider we know it’s a competitive market right now, marketing costs or advertising costs kind of per deal are up and it’s like if you could . . . with a typical VA and of course, you could use automation with texting and voice mail blasts and stuff like that that doesn’t really cost you anything but even with if you have virtual assistance following up, which I do a lot of times if they help me get one deal in a year, that probably offsets what it cost me to pay for them for a year. What does it costing you to not follow up, right? Your marketing is inefficient and spending more money on marketing is not always the answer.
Damon: Yeah, and I’ve got some other statistics and everything else that actually show the majority of transactions. So 81% of transactions actually happened after the fifth touch, okay? So the fifth touch. Now, so you would think that if 81% of all transactions happen after the fifth touch, then that means all real estate investors are at least following up five times, right? Because we know that stuff. But no, the reality is there are only 8% of real estate investors that are actually following up five times or more. And so if you think about that for a minute, 81% of transactions happen after the fifth touch and only 8% of real estate investors are following up five times or more, 8% of investors out there are getting 81% of the transactions because they simply follow up.
And so those of you guys out there or watching this or everything else right now, I want you to think about it. I mean, you go to your local REI club, you go to your local meetings and everything else, and you can always see the one or two guys in the room that are dominating the market. And I would guarantee you it is because they have follow-up systems in place whether it’s a VA, whether it’s technology, whatever it is. But, guys, sincerely, we talked about lead generation problems but it really is typically a follow-up problem. And you know what, marketing is getting a lot more expensive these days. I mean, you just said it, your marketing per deal is up, things of that nature and I just think it’s insane that so many business owners and investors out there are throwing away leads and just not following up adequately even when they’re told no the first time.
Mike: Yeah, and what I want to point out here . . . and I don’t mean to pigeonhole people, if you’re not, here’s what I’m going to say is that in my experience, some of the best real estate investors have a high salesman aptitude. They’re salesy, they love to sell, they love to meet with people, they love talking with people. I’m not trying to say for the introverts out there that you can’t be successful in this business so that you’re not. But if you are one of those people that, “I love to sit at the table and talk to people, I love trying to do deals and talking to people,” you’re probably not very good at follow-up because that’s a detail-oriented task.
And so I think it’s just important to identify because I know that about myself. I know how critical follow up is and I know that I would never call somebody 54 times so, therefore, I just had to define processes and assign it to people that I know that would get it done on my behalf. So if you hear this and you know that like, “Yeah, I would give up after the third time,” or like “They’re not answering the phone. I’m leaving another voice mail,” if that’s you then you still have to do it. You have to get it done, it doesn’t mean that you have to do it, right?
Damon: Right. And that’s super important part and especially as business owners, first of all, you guys will have to realize that you’re building a business. I mean, you are a business owner and you can look at every successful business out there, I promise you the guy at the top is not doing everything. And in fact he should be setting the vision, the mission. I mean, there are some things that he should be doing. But absolutely, guys, first of all, identify your weaknesses.
And I think corporate America has this backward by the way. I mean, I worked in the corporate world for a while as well and your quarterly reviews or annual reviews, it was always they bring you in, they sit you down and they tell you what you’re not very good at, and then they want you to work on that. It’s like, “We need you to get better at doing this because you’re not very good at that and you need to focus on that.” Like, “Well, I’m not very good at it because I don’t like to do it. I don’t enjoy it. But I’m really good at these things so I’d love to focus on those, right?”
And as a business owner, I would tell you guys kind of piggybacking on what Mike just said is if you don’t know what you love to do and you don’t know what you’re really good at and what you enjoy and equally know what you’re not good at and what you just don’t enjoy to do, you really need to sit down and do some self-evaluation. Look at everything in the process and outsource everything that sucks. I mean, outsource everything, delegate it and systematize it because that stuff has to get done, but you don’t have to do it. It’s a perfect, perfect example.
Mike: Yeah, I think it’s tough because a lot of new investors and not everybody fits this, but where they left corporate America. But you came from a company where there was an IT guy, if you’re printed in or if you needed to hire somebody, there’s HR, there were resources, probably more resources than, it’s not probably, certainly more resources than any of us have when we start off a real estate investor because we’re trying to do everything. We’re trying to be lean and mean. And I think there’s a balance there somewhere. I’m not saying that if you’re broke, you can’t be successful starting off as a real estate investor because some of the people that I know that are most successful really were flat broke and kind of hit rock bottom in terms of financially, and they had to be successful, it wasn’t an option. And that’s kind of how I started is failure just simply was not an option that I could accept anymore.
But it helps to have resources because, ultimately, a lot of people seemed to forget when they get into the real estate investing business that this is a business. You have to have systems. You have to have processes. You’re going to have to have people soon, otherwise, even if you are successful, successful could just be I replace my income, well, if you don’t have those things in place, you’ve done nothing more than create another job for yourself.
Damon: A job you can’t leave.
Mike: You can’t leave to go on that vacation next week because the deal flow stops. So if you really want to be successful in this business, you’ve got to treat it like a business and you’ve got to recognize that you can’t do it all.
Damon: Yup. Dead on, man. I actually . . . and I’m sure this has been out there for a while, I just heard it the other day for the first time, and it was like, “All right. What’s the definition of financial freedom and success?” It’s like I can go on vacation and I come back, and a true vacation where you truly unplug and everything else, and I come home and I’ve got more money in my bank account than when I left, you know. When I heard that, it’s like, “Man, that totally is . . . ” how many of us, A, can’t leave on vacation right now anyways because everything stops and so we can’t even financially afford it, but even more importantly, how many of us are actually making money when you’re on vacation, you know? And that’s the freedom piece.
So we kind of talk to recap a little bit on the pillars we talked about pillar number one is the marketing, lead generation. You’ve got to be able to generate the leads and then you’ve got to be able to follow up, you’ve got to have systems in place to be able to do the follow-up. Unfortunately, for most of us, especially as we’re trying to do it all and we’re not treating this like a business, whenever we actually go out and do our marketing and our lead generation and we’ve got a bunch of leads in the door, now we really start focusing on the follow-up and we stop marketing, right? We turn off the marketing because like, “Oh, we’ve got too much going on.” And so now, all of a sudden I generate, let’s just say, 100 leads, statistically speaking, two of them are ready to do something. And so now, I filter out and I figure out and I found out the two that are going do something.
I really move them into the next pillar, which is pillar number three, which is specifically in the real estate business is really deal management. So I’m actually managing the deal. That’s more of your operational role. And once you get that contract signed, especially in real estate, I mean, it doesn’t just . . . you sign the contract and “Wow, hey, I’m ready to cash a check.” I mean, there’s still a lot of additional work depending on your strategies, what you’re doing, are you buying and holding, lease? I mean, there are so many different strategies obviously to go in on this call. But once we actually get to that point and we actually get the contract, now, we’ve got to start doing that and guess what we stopped doing now? Now we stop following up, right?
So now, all those other people that we had generated leads, we stopped following up and then we get to the fifth pillar, or I’m sorry, the fourth pillar, which is actually closing the deal, cashing the check. And you want to be able to do that in such a way that you can create a referral model, right? So now, you create such an experience for those individuals that they’re going to start referring. And now, you need to also orchestrate that so there’s a whole process where you need to proactively reach out to those folks, orchestrate it so they can actually send you referrals, right? So there’s actually a process and system. And so once we get to that point, though, we cash the check, we turn around, we look and we’re like, “All right, I’m ready to do the next deal.” But the problem is there’s no pipeline.
Mike: You start marketing again.
Damon: Yeah, and you just go back over and you start the process all over again. And that actually introduces the fifth pillar, which we’ve already kind of been talking about anyways. And the fifth pillar is kind of the fundamental underlying pillar between all four pillars and that is systems, right? You have to have systems to continue to be able to market for you to be able to do the follow-up. And again, you’ve got to identify what you enjoy and what you love to do so that you can focus on those things. That’s what you need to be doing in your business. And you’ve got to have systems and processes in place to be able to do all those other things so that it works without you. At that point, you’ve actually created a business, not a job, right? And that’s the fundamentals of the five pillars.
Mike: Yeah, even if you do everything, I mean, I’m here to tell you for somebody that’s done a lot of volume in certain years, even if you’re in non-stop advertising and lead generating and you’ve got your systems mostly figured out, this is still financially a roller coaster business you’re going to have. You don’t do a deal for three weeks even if you’re advertising a lot, and all of a sudden you do two or three deals in one day. Your sales kind of get clustered up where you have a killer month, and then the next month, you lose money. So even if you’re doing it right, this is not a steady paycheck. It’s like a business.
And I’ll tell you what, there’s a massive tailwhip effect if you stop advertising. You can never stop generating leads or feeding your funnel because that’s the only way that is ever going to . . . you’re going to be able to stomach this business is if it has some level of consistency, which even when it does, that’s nowhere near as consistent as a steady paycheck, which is okay. But why put yourself through the drama of having to start over every four times a year because I got a deal and now, I’m going to stop everything and just do this deal. When I sell it, I’m going to start again. There’s no way you’re going to really be able to operate a successful business that way.
Damon: Nope, not at all, not at all. I mean, the lead gen and the marketing piece, I know that’s kind of your theme right now, Mike. I mean, that’s imperative, honestly, to any business. I think we all know that. And I think a lot of people do struggle with that. I mean, some people absolutely love the marketing, but I think as a business owner, that’s really where you’ve got to step back and say, “Okay, fine. If I don’t enjoy the marketing or maybe I’m not having the success or the results I need, then okay, I need to bring in . . . ” what would you do in another business? I mean, you would bring either outside consultants, you would hire somebody.
I mean, you would solve that problem but that’s the first problem. I mean, if you don’t have that piece figured out, guys, I mean, this is a hobby at best for you. I mean, you’ve got to get that lead gen dialed in. But then, like I said the money, it’s one thing to make the phone ring or the email ding, right, to get leads submitted and you need a good, solid CRM system, guys, that can help you segment and follow up intelligently, right? I mean, there are lots of different tools out there.
Mike: Do you know of any systems, Damon?
Damon: I might be a little biased, but the tools are important, right? I mean, you’re not going to go become a farmer without a tractor probably, right? I mean, there are certain things that you definitely need in your business. And sincerely, I mean, I tell people all the time, obviously, I’ve got a little bit of bias and I want you to jump on the board with REI BlackBook. But the reality is, guys, even if you don’t use REI BlackBook, I mean, you need to use something. I don’t even care if it’s a Google Spreadsheet to track and maintain your contacts so that you know that you’re following up consistently because the sticky note chaos is not a system, okay? Post-It notes are not a system.
Mike: And I will tell, you need to have a CRM, you need to have certain tools to run your business. But a lot of times, some people will get glazed over a little bit when we’re talking about systems because sometimes, systems are just a defined process for how you do something. It doesn’t necessarily need to be technology. It can just be . . . it could be a checklist, right? It could be something simple and I think the important part is those are the things that allow you to scale and allow you to . . . a lot of the stuff in this business, quite frankly, is very redundant. In this business, from a marketing standpoint, well, I have to order direct mail, I have to do this because every month, it’s the same thing over and over again. Which is why, for a lot of real estate investors, their first hire should be a strong admin because it’s just repetitive, administrative-type tasks that you can do over and over again.
When we buy a house, we have a task list of . . . I don’t know exactly what. Like, 78 tasks that we do from the time we get a contract to buy a house, if we’re going to rehab it, until the time we confirm that we’ve got the wire and everything in between from the beginning, we sign the document. I have to sign the document as the owner then I send it to the title company, then we kind of go through these steps all the way to the end of it, take the lock box off the door, tell the realtor to take the sign out of the yard there are just individual task. But as you create these kinds of systems and processes, then it allows you to kind of scale your business and be able to do more things where, whether it’s networking or setting up some of these systems that you might be behind on or God forbid, whether it’s enjoying your life a little bit more and spending more time with your family, right?
Damon: Right. I mean, the key there is you get to pick, right?
Mike: That’s right.
Damon: You actually can start having some options of what you want to do. I mean, you and I are both part of a mastermind together and everything else and it’s interesting to see the diversity even . . . there are probably I don’t know, 100 top investors in that group but the diversity of some of those guys are just workaholics and they love to work and that’s what they do and that’s where they get their enjoyment and that’s awesome. And then some guys are just on the beach way more than the others, you know.
Mike: The lifestyle and the lifestyle crew.
Damon: Right. And it’s totally . . . you’re good at either way. I mean, the cool part is it’s your choice. It’s your life and that’s a really good point, by the way, because I think a lot of people do get caught up when they hear the word systems to think that’s instantly technology. And it’s not. Now, the one good thing about this business is that it is very checklist-oriented. It is very repetitive, the processes and stuff like that. So once you get that stuff defined, it’s a lot easier than some other businesses that I’m involved in to be able to bring other people in to help you do those tasks and to outsource it and to systematize it much more quickly.
Mike: Yeah, absolutely. Well, Damon, I definitely appreciate you spending some time with us today.
Damon: Thanks, man. I appreciate it. I love, love, love being able to share and I appreciate you giving me the opportunity.
Mike: Yeah, so tell us a little bit if folks want to learn more about REI BlackBook and some of the things you’ve got going on or even find a way to connect with you, where should they go to learn more?
Damon: Just reiblackbook.com. And, in fact, if you’re out there struggling with a simple system, guys, we’ve got a 30-day free trial. Go try it out. Once you’re on that 30-day free trial, we do a bunch of additional lead generation training, education, stuff like that so all that’s on reiblackbook.com. Super easy.
Mike: That’s awesome. That’s awesome. Well, everybody, thanks for joining us today. That was Damon Remy, show number 349. We appreciate you. We’re going to keep these shows coming at you. We’re doing them live now so usually on Wednesdays because I’m having a hard time. But we have a FlipNerd fan page on Facebook and, for some reason, I can’t . . . this tool we use to do our interviews. I can’t do it to a fan page, I can only do it to a group. So that’s why I had to do it on my personal profile. But anyway, as soon as the wind changes directions, the technology on that will change.
But just keep an eye on my Facebook profile, I guess, if you want to watch these live. And what we do actually with the live episodes is kind of after the episode, so just a minute here, we’re going to actually open it up to Q and A, people that are listening if they have some questions and have a little bit of some additional discussions. So check us out live or whether you’re watching us on iTunes or anywhere else, you have 348 more episodes to watch and listen to if you haven’t yet. Everybody, thanks for following along with us. We appreciate you. Wish you all the best and we’ll see you on another episode soon. Have a great day.
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