This is episode #441, and my guests today are partners Felipe Boss and Jesus Toledo.
Most real estate investors, myself included, are guilty of focusing on the easy route as it comes to lead generation and acquisitions. Mass approaches to marketing such as direct mail are alive and well, but not performing as well as they used to.
Felipe and Jesus are part of what I’ll call the new era of investors that are willing to spend more time on researching data, really understanding the specifics of their market, and ultimately, picking up the phone to contact potential sellers in a rifle vs. shotgun approach.
If you’re just getting started in investing and have a limited budget, this is good news for you. If you’re a veteran investor that’s been willing to spend big money on lead generation, this is also good for you…as you have the resources to get this done.
There are lots of great nuggets shared today on the show…no matter where you’re at in your real estate investing career…you’re going to learn some powerful tips.
Let’s get started. Please help me welcome Felipe and Jesus 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 441, and my guests today are partners Felipe Boss and Jesus Toledo. Most real estate investors, myself included, are guilty of focusing on the easy route as it comes to lead generation and acquisitions. Mass approaches to marketing, such as direct mail, are alive and well, but they’re just not performing as well as they used to.
Felipe and Jesus are a part of what I’ll call the new era of investors that are willing to spend more time on researching data, really understanding the specifics of their market, and ultimately willing to pick up the phone and contact potential sellers in a rifle versus a shotgun approach.
If you’re just getting started in investing and have a limited budget, this is good news for you. Now if you’re a veteran investor that’s been willing to spend big money on lead generation, this is also good for you as you have the resources to get this done unlike anyone else. There are a lot of great nuggets shared in today’s show. I don’t want to steal the thunder here. No matter where you’re at in your real estate investing career, you’re going to learn some very powerful tips and some useful information that you can put in place right now to help build your business. Let’s go ahead and get started. Please help me welcome Felipe and Jesus to the show.
Hey, guys. Welcome to the show.
Jesus:Thank you, Mike. Thank you for having us.
Mike:Yeah, excited to have you.
Jesus:It’s a pleasure.
Mike:Yeah, excited to have you guys on today. And honestly it’s fairly rare. We’ve had it before. We had two people on at once, but you guys are like brothers. You’re tied at the hip and mad scientists over there, so I’m really excited to have you on. I’m really excited to talk today about, you know, we were talking about this ahead of time for folks that are listening right now is, and I’m guilty of this too. As a real estate investor for the past 10, 11 years, I’ve kind of done what most investors do, and that’s kind of the shotgun approach, like as I grow I just write a bigger and bigger check and send out more and more direct mail or try to do things in a mass way that is easy for me to push a button from behind a computer and not kind of get laser focused.
But, you know, a lot of those things that we’ve done over the years just aren’t working as well as they used to, and people that are doing really well right now, like you guys, I found are taking a very kind of systematic and more of a rifle approach versus a shotgun approach. So I don’t want to steal all of your thunder, but that’s kind of the premise of what we’re going to talk about today. So again, excited to have you guys here. Hey, before we get started, why don’t you guys tell us a little bit about your background and kind of how you got started in real estate investing.
Felipe: I mean, our background where, we’ve been friends for about 20 years. Born and raised in South America in Chile. And we both moved to Miami, what was it? I moved here 10 years ago.
Jesus: And I moved six years ago, yeah.
Jesus: Since I was in college I started some businesses in Chile, some online-related businesses, and when I moved into the U.S., I was looking to do something differently. And then after a few years going back and forth, I finally convinced Felipe.
Felipe: He dragged me to a real estate investing club here in Broward. That’s how it all started.
Mike: Going to a real estate club.
Jesus: Yeah. We read the “Rich Dad Poor Dad,” and they were mentioning the national REIA association. And then we started looking for one nearby, and we ended up going to one and I convinced Felipe, “Let’s go, please trust me. This one is going to be good. Let’s go. Let’s go.” And we went to it and we decided to go all in.
Mike: That’s great. You know what’s funny, on the show like literally, probably a third of the shows I’ve ever had usually say, you know, “Then I read ‘Rich Dad Poor Dad'” or “Then I went to a real estate club,” and so it’s kind of a cliché at this point, but that’s how most people . . . Honestly, I was the same way. I went to a real estate, a local real estate club and, you know, I didn’t learn a whole lot there, but that was the catalyst that got me interested and kind of hooked.
Jesus: No, it was absolutely the same for us. Of course, we learned from them, we connected with a lot of people, but we didn’t take the mentoring program there or anything. But it was like, “Oh, this is it. This is it.” My last business was selling baby clothes online, so I was making 50 cents per transaction, and I was convincing Felipe let’s go look for something that we can make good transactions and make more money per transaction.
Felipe:Higher ticket sale and then we came across this wholesaling concept, and we’re like, okay, let’s figure out what it is, and that’s how we got started. And since the minute we went to that meeting was probably by the end of 2016. We really got started fulltime. We went fulltime June of last year.
Jesus: Yeah. We started doing some marketing in March 2017. Then we went fulltime in June.
Mike: That’s great. So for those of you that are listening right now, these guys have really only been hitting this hard for two years or less, right? So pretty new. And you guys are doing some pretty big deals and some pretty significant volume now, right?
Jesus: Yeah, we focus more on the spreads than on the volume. Of course, we love volume as well, but our focus is making less deals with more profits. That’s our sole focus. We always challenge ourselves to increase our profit margins.
Mike: Yeah. That’s great. That’s actually going to be defining the rest of the show is doing more with less, right? That’s really what today’s show is about. So we kind of talked about it up front about really being willing to do the hard work and the research and all the stuff you have to do up front to really have more of a laser focus. Would you kind of talk a little bit about why you take that approach? Because so many that get started do it differently. They’re kind of just doing mass, things in a mass format, mass communications, whether it’s direct mail or just general internet advertising or whatever. Talk about like how you decided to get focused like that.
Felipe: We’re big fans of the 80-20 principle, the Pareto law. So it’s a simple rule, you know, 80% of your results are going to come from 20% of your effort. And before we got started, once we went fulltime, it’s just what you said it, Mike, it’s like how do we do more with less, and that’s why we just started doing the list stacking . . .
Jesus: Yeah, it was like a challenge managing the different type of lists, right, because we were new. We didn’t know what list was the best one. We didn’t know anything about that. So we were hitting tax delinquent, probates, absentee owners, high equity, and we were trying to figure out and process the data, and we realized that a lot of properties were repeating themselves in different lists. So I said, “Oh, this is weird. I don’t want to send the same marketing for the properties that are on different lists. That doesn’t make any sense.”
For us it didn’t make any sense. So let’s look for those, and then we learned that it was more than we thought. Properties were on different lists, and then that’s when we created our scoring system is a point system. It’s mainly a stacking list. You probably talked about this previously on the show, but it’s mainly looking for the properties that are on different lists and targeting our marketing to them. That’s where we saw, oh, these properties, if they are tax delinquent, and they are divorce, and also there’s a death in family, they’re probably more motivated to sell at a discount price than a person who is only, I don’t know, one year delinquent in taxes, right?
Mike: Right. Yeah, it makes so much sense. It makes so much sense, right?
Mike:But I’ll tell you for years, for years and years and years, what we did in our business is if we got return mail, we’d take them off of the list and throw that away. Like, it’s just crazy now to think about how we used to think and truthfully how a lot of real estate investors still are. So I have a rental portfolio, and we talked about this a little before too, but there are some investors, some pretty significant investors in my market that whenever we check our mail, we have a PO Box that everything goes to for our rentals, sometimes there’ll be three or four postcards or letters in there from the same company. And these are people that are pretty sophisticated and they’re still doing it that way.
And so the interesting thing is not only scrubbing them off of your list so you’re mailing them one time, but like you said, realizing that if those people or houses, I guess, are on multiple lists, that should tell you that there is more motivation there. They’ve got more kind of flags raised, right?
Jesus: It’s like when you’re driving for dollars, if you only see a broken window, it’s not as important if they have tall grass, boarded up windows, the roof is broken, everything is broken, it’s oh, that one is really distressed. That’s our approach that we took when we saw these problems repeating themselves in different lists.
Mike: Yeah, that’s great. And I hope that new investors that are listening to this are inspired by this, because, you know, this is harder work to do what we’re going to talk about today. You’ve got to be willing to put the effort in. But for those that start, most real estate investors start with a limited budget, right? And you guys, I don’t know if that was part of what drove you, but you can actually start with a much lower budget because you’re weeding out marketing to a bunch of people that, you know, don’t have as many points or as many flags as the others, right?
Felipe: That’s true. That’s true. We bootstrapped since we started. Not only you can start with a smaller budget, it’s going to be more effective in the long run. That’s what you can do.
Jesus: Of course, budget, it’s a concern, right? You’re getting into a new business. You don’t want to overspend. You don’t know what marketing materials are going to work, a letter, a postcard, what type are the ones. There are so many unknowns that we thought, well, let’s really be targeted, very intentional about how we go about it. And we ended up getting great results because we were getting more profits with less transactions. That was like our end result, and it was perfect for us because that was exactly what we were looking for. Do less transactions with higher margins and that was like a [blessing 00:11:06] for us.
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Jesus: . . . very intentional about how we go about it. And we ended up getting great results because we were getting more profits with less transactions. That was like our end result, and it was perfect for us because that was exactly what we were looking for. Do less transactions with higher margins and that was like a [blessing 00:12:26] for us.
Mike: Yeah. So you guys, I don’t want to steal your thunder, but you guys are primarily calling people, text messaging. You’re not really sending direct mail at this point, right?
Jesus:Not at all.
Jesus: Not at all. Actually, we tried once. We sent like 500 letters, and since we were targeting the higher distressed, we got like 50%, 30%. I don’t remember the return mails. Everything came back, because those people are really hard to get a hold of so it was really funny. We were always looking to do . . . I don’t know. It’s not about the money or the cheapest one, it’s because we found it was more effective. That’s why went to phone. Felipe has a strong background in sales. He’s great on the phone. So we started cold calling. Then we migrated doing other types of communication through the phone — text message, ringless voicemails — everything related to the phone because those touches are cheaper than direct mail.
Mike: Right. No doubt.
Jesus:And more effective.
Mike:One of the key parts of what we’re talking about here is really understanding your data, right, and understanding your market too. But let’s start with data. You guys are cold calling, text messaging, finding ways to maybe doing some skip tracing, trying to find how to contact people that are harder to contact than average, and we talked about this a little bit up front that a lot of real estate investors are just lazy. Like if they can’t write a check for direct mail, or they can’t do something in a mass way, they just don’t do it. So a lot of people give up and aren’t willing to do some of the extra legwork that you guys are doings.
But that all starts with understanding your data, right, like knowing what you have and building a system so that you know who is on multiple lists and who even owns this house. Sometimes, you know, a lot of real estate investors can’t even figure that out. So talk about that a little bit, the importance of that and let’s kind of get into, I know it’s different in every market, but where you even get some of your data at.
Felipe: The beauty of data and how to get targeted is that it’s available to all of us. It’s public records. Our biggest sources if you want to call it pain motivation, like whatever it’s actually happening with a person or a property, you can go to your local county office or even go online in some counties and that information is there.
The work comes into consolidating that information. That’s why Jesus is like the genius, the mastermind behind our point system and consolidating everything into . . . think about it as a pyramid, where you have the at the bottom you have people that have some level of distress, and as you go up, there are more and more pain points that make these people likely to sell at a discount. So for anybody out there that are just getting started, it takes some work, but it pays off.
Jesus: To add to what Felipe is saying, the challenge is it’s easy to build lists scores by all absentee, high owner, high equity and send direct mail traffic by, but if you really dig deep in your county, go talk to the city, get the list of code violations, go talk to the property appraiser, get the tax delinquency, try to find out the direct source of the probates, you’ll get the best data available in your county, in your cities and you’re going to get the best results for sure.
Mike: Yeah, I think that one of the things we’ve talked about before is a lot of people also are lazy, and they might go buy that data from a provider, right? But I think you would agree that . . . Honestly, I’ve done that for many, many years. But just having worked with data before myself in my corporate life, you know what kind of happens is, for those people that are reselling it, they might get a list, let’s just hypothetically say of a thousand names or addresses and there’s like data missing, or they don’t have a last name for this person and they’re like, “Just delete this crap. We’re just going to sell.” So that thousand records might end up being 800 or 900 by the time it gets to the people that are buying it. And the reality is then 100 people are buying that, so all of those people are competing for those 800 of 1,000, but nobody is even looking at the other 200, right?
Felipe: No and when you’re buying from data providers, you don’t know how they sorted out the data either. For example, I know this has been mentioned before for the last sell date. It’s something that I believe ListSource doesn’t provide. If it’s empty because the property was purchased a long, long time ago, you’re not going to get that record because it’s empty on their database. So if you go to the county, you’re going to get those directly from the county.
You can get that information. We believe that you need to put your best effort in being the person who knows all the sources of data in your county, in your city, in the areas that you’re targeting in your market.
Jesus:The more work you put in the front end on filtering the data, because when you get data from public records, it’s raw data. It needs to be like sorted out. That’s where you know having a good spreadsheet, it’s very important. But the more you work it, the more targeted your marketing can be, and it gets to a point where right now cold calling is very popular these days, but one common objection is, “How do you get my number? How do you know who I am?” It’s like playing Big Brother here.
Mike: Right. A lot of people would say that, “Well, I asked the city, and they won’t give me that data.” So that’s a pretty common thing. I think at this point it’s public information, so they generally are required by law even to give you that data, right? That doesn’t mean you’re not going to have to jump through a bunch of hoops. But eventually you can get that data pretty much anywhere, right?
Felipe: Absolutely. We’re not attorneys, so I don’t know the regulations on how to go about it. We just try to be friendly and ask them. I know this is an unusual request, but I know this information should be available and try to be nice and persistent. We’re very persistent. We follow up with emails every week to make sure that we gather the data, especially the code violations. That’s one of the hardest ones because it’s per city, it’s per municipality. So it’s a little harder to get other than the tax delinquents that it’s one per county. It’s a little easier.
Mike: Yeah. And you guys are . . . For those that are listening right now, there are some softwares out there for stacking lists and managing data. Are you guys just using Excel for this?
Felipe: Well, for the most part, yes. We’re building our own system to process it more efficiently. But there are some because we go a little deeper than just stacking the list. We believe there’s stacking within each list. So just to give you an example, we believe that a property if it’s delinquent two or three years, it’s more likely to be distressed than a property that’s only one year delinquent, right? Or was delinquent in the past, some people don’t realize when you buy a tax delinquent list, sometimes you’re buying old data. It’s a year old, so you’re not getting the actual data. That’s why it’s so important to get the records from the source that you get the most updated one. For example, the two biggest public data sources are taxes and code violations. It’s not the same because a code violation can be fire damage all the way from that to an unpaid dog tag. So there’s an 80-20, within the 80-20 where we prioritize the data that we get so we treat them accordingly.
Jesus: Yeah. And to you point, yes, you can use definitely a software. You don’t need to use an Excel sheet. We are a little complicated. We like to complicate things. We like to go really deep.
Jesus:You can go as deep as you want on this, but the simpler approach would be buy different lists, put them on a software that can stack your list, and you have a pretty good starting point. And for everybody who’s sending direct mail, a must should be go after the return mails. That would be a must.
Mike: For sure.
Jesus:That is money there for sure.
Mike:For those of you that are listening right now, if you’re not familiar with this or you haven’t heard us talk about this before, or anybody else talk about this, this concept of list stacking. So if you were to buy a list that was probate leads and delinquent taxes, usually these lists come separately. Tax delinquent, recent divorce, code compliance issues, there’s a whole bunch of different lists that as real estate investors we buy and usually send mail to or maybe cold call.
And what these guys are doing and what a lot of top real estate investors are doing these days is they’re stacking them. So they’re basically saying I have this address 123 Main Street, and you’re not looking at it individually. You’re doing this with software or Excel, saying how many lists is 123 Main Street on, and that starts to tell you, well, if they’re behind on taxes and somebody just died there and it has two years of mowing liens and like all these different criteria, every one of those is a separate flag. And so the more lists it’s on, effectively the more motivation there should be to do something, right? So it’s pretty powerful stuff. And it’s so simple conceptually, but it’s funny how not many people have been doing that forever.
Felipe: Well, it’s funny sometimes when we talk to people, they don’t even know they own the property. They think the bank took it away from them. Our most profitable deals came from people saying, “Oh, I don’t own the property anymore. It’s the bank’s property.” Oh, it’s not. You’re still on the title, and we could make something for you.
Felipe:People that have given on their property.
Jesus:They’ve given up. Yeah.
Mike: And a lot of real estate investors give up when they hear that too. They’re like, “Oh, you don’t have it anymore? Oh, okay. Sorry to waste your time. Bye.” Right?
Felipe:Yeah. We’re very persistent.
Mike: Yeah. So talk about the importance of kind of knowing your market. There’s a lot to be said for understanding geographically where . . . Certainly you can say where are the parts of town that you want to get deals in. Right? But also just understanding kind of unique things about your market that’ll help you overcome some of the challenges you might come across. Talk about that a little bit.
Felipe: The importance of knowing the market, it’s critical, because like you have to be the go-to person when it comes to like those deals. And it’s so important to know the market trends, what zoning changes are going to happen in the neighborhoods, what ZIP codes are hot, and knowing all of that and actually knowing also how the law works, especially what you can do and what you can’t do, because one of the things about going so deep in data and these types of properties is like there’s a high headache factor. So you’ve got to evaluate and be like, okay, how much am I going to tolerate in order to get this deal done.
Jesus: I would add that especially, particularly the geographic zoning is very important. Of course, you want to know the hot ZIP codes. You want to know all of that, but understanding how the data is presented to you. I’ll give you a quick example. In our counties, when a person is deceased, they put in front the name “state of,” right? And we didn’t know what state of was when we started, so we started digging up and we heard some people say it was probate open. But then we ended up knowing that they’re not probate open. It just means that some way, somehow the county found out that that person is deceased, and now they changed the ownership of the property back.
If you just track those people is in our county, that information might not be available in all counties, all data sources. But, for us, it was an aha moment. We found a huge list of deceased people that were not on the probate list. They were not on any list. It’s just people that passed away. Some way the county found out and changed the ownership. For us, that was free information. It was on the same data source that came from all the properties ownership names that was all we got.
Felipe:So imagine this, because that was, as Jesus said, was the biggest game-changer. When you actually skip trace a contact and build a relationship with the relatives of this deceased person, which in most cases they’re like I didn’t even know this gentleman had a house. But you go and you build that relationship, you do that and you’re willing to help those people to get paid for a property that legally they inherited, you’re no longer going after a probate lead. Actually, they’re creating and controlling a probate lead. Because we front that cost, we help them out and it’s very rewarding at the end, because these people really are very thankful for that. And at the beginning, with the cities, the cities didn’t really know or care about us. But now last year, this year, we’re ongoing, we’re probably going to pay like, what, $600,000 in back taxes to the city.
Jesus:Just on the properties. Yeah.
Felipe:Just on properties that were close, so it’s . . .
Mike: Do they know that? Do you tell them, hey, we help get these houses sold and helped you guys make . . . I think about that all the time. It’s a whole separate story. We have a house that . . . I don’t even want to get into this story. It’s a long story. But I was like if I could just talk to somebody at the city, right now the tax value is $120,000, but I want to do something here that will have a million tax value of houses, properties on this lot.
Long story. But it’s like if I could just talk to the city about that, they would be like, “Oh my god, yeah. We’re partners. We need to help you do this.” But usually you’re going to go talk to a clerk that’s making a little bit over minimum wage, and they’re just like, “Yeah, get in line.” Do they understand like . . . I found a lot of cities don’t understand. Like in Dallas in the DFW market, for example, approximately 40% of the houses here are rental properties. But they think we’re like house flippers, we’re like these bad people. But it’s like we’re one of your biggest customers, and we pay on time by the way.
So they just don’t think like that. So do you get any more respect for the fact that you’re helping the city collect revenue?
Felipe:In the beginning, just like in any public office, they were like they don’t care who you are. But now that they see you in like, for example, mitigation hearings for code violations and all that, you start building that relationship, and then actually that’s part of the hard work that you’ve got to be willing to do in order to maximize the profits. It’s part of also being a subject matter expert in your market and knowing what to do and when to do it. Knowing what you can do with a property and what you won’t be able to do and just walk away from the deal. Because there are deals that no matter what you say, it’s won’t work.
Jesus: You can give us for free and you can [inaudible 00:28:39].
Felipe: We learn the hard road.
Mike: Yeah, that’s great. Again, just be willing to do the work and focus on whether it’s the parts of town or the data that would indicate that that has the most motivation there and don’t focus on the ones that . . . yeah, they have that, for example, absentee owner with equity. It’s like, well, I mean, there’s people that have their house paid off. That doesn’t mean it’s for sale, and it doesn’t mean that they’re in a distressed situation, right? Focus on the data that tells you that there probably is real motivation there.
Jesus: Yeah. We like to think, just to throw numbers. For example, the absentee owner with high equity, 1 out of 10,000 is going sell the property, right? But when you work on the data beforehand, it might be 1 out of 1,000, maybe 1 out of 500 that’s going to be selling their house. Maybe 1 out of 100 is going to be selling their house. So for us it’s more efficient. That’s why we put a lot of work before we send out marketing.
Mike: Yep. And then let’s get to the last point here is being willing to pick up the phone. call people, text them, whatever you’ve got to do to get a hold of them, but not we’ll just put them on the list and send them mail, which is what a lot of investors do and I’m guilty of that too. But being willing to take that extra effort to just pick up the damn phone and call people, right? So talk about that a little bit, just the power of that as an investor in terms of helping people that are listening right now understand why they should be doing more of that.
Felipe: I’ve got to give a shout out to my mentor in sales, Paul Diamond. He taught me how the importance of the phone. The phone is not a cactus. A lot of times, you know, we shy away from it. We hide behind direct mail, the email, PPC, and really the telephone is still the most powerful prospecting tool, whether you do via direct phone call, a text message. Everybody these days they have smartphones. They look at their phones. It’s about getting comfortable with the uncomfortable. It’s extremely uncomfortable to cold call people and call them out of the blue. But really when you’re going after a targeted list where timing is of the essence, where people are constantly changing phone numbers or just like hard to reach, you may have one opportunity to get a hold of them, and so that’s why you’ve got to be superb when that happens. It’s very important. For us it’s been, I mean, there’s nothing wrong with doing other marketing channels, but for us we’d just rather take a deep dive in using the phone. It works.
Jesus: For us, the response rate is way higher. I mean, we’re very proactive. So for us, in the beginning especially, sending a direct mail and waiting for something to happen was kind of, “Oh my god. I can’t do that. It’s too much uncertainty.” Let’s grab the phone. I know I’m going to be controlling the situation. If I want to talk to more people, we need to make more dials. We can add one more person to the calls, but it’s just taking a proactive approach to getting a hold of the owners and the properties that might be for sale. That’s for us was a mandatory thing, be proactive about our marketing, not send something out and wait. The results on it are really sound.
Mike: And the types of people that you guys are calling based on they’ve got a lot of data points that say there’s some motivation there. Have you found . . . And I know you guys don’t mass . . . There’s some people that are just mass calling like tens of thousands of people and dialing systems where they’re simultaneously dialing lots of numbers. I understand that model. But have you found that by kind of laser targeting people that have all these motivational things, that they’re more willing to kind of have that conversation with you?
Felipe: Not that they’re more willing, because a lot . . . You still . . . I would say it’s a highly . . . the rejection rate is extremely high. But once you understand what’s happening in their minds, you know, they didn’t put themselves in line to owe all these taxes, to have these code violations. There’s a life event, something that happens. So once you understand and you treat these people with respect, and even if sometimes they curse you out, don’t call me anymore, or whatever, sometimes just something as simple as an apology call a couple of hours later and they open up and you have quality conversations with them.
Jesus: You need to think about that when you’re targeting the list, they’re very likely to be in a very sensitive situation, personal. And of course, if somebody calls you out of the blue and you’re having a bad day or a bad week, or a bad month, a bad year, right, you’re not going to be as willing to talk to them if everything was okay. So we understand that, and sometimes that’s why the persistency and being proactive comes in play. We call them a couple times more, just to make sure that wasn’t a bad day and maybe we can catch them at a better time or day and follow up. Follow-up is king for us.
Mike: Sure, sure. How do you guys position yourself? Like at what point do you say you’re trying to basically help them by buying the house? Do you talk about just solving the solution of that they have back taxes or that they have some distress coming on? Seems like they would be more put off by the fact that you say we’re looking, do you own this house, and kind of going right at the house instead of it looks like you might have some issues and we want to help be a solution for that.
Felipe: We’ve tried both approaches. The total transparency approach, like literally being like, “Hey, Mike you have a problem.” No, that definitely didn’t work. We got rid of it.
Mike: You’ve got issues.
Felipe: Right. So now it’s really casual. Like a lot of investors are probably going through that training, the John Martinez framework, you know, when you’re calling out of the blue, and then it’s just the only I would say advantage point for us is that we know exactly what’s going on with the property, and so the conversation that we have with these prospects we allow them to share that information before us just shooting that at them, because otherwise people, just like Jesus said, they’re in a very sensitive state, it’s like an emotional rollercoaster. So you’ve got to be very careful with what you actually tell them, you know, because a call can quickly go sour.
Jesus: The advantage is we have the data in front of us when we’re calling them, so we can guide the conversation towards them revealing that information to us instead of us giving it to them was a big change that we did with . . . A year ago we were trying a lot of things, and then we tried let’s try to guide the conversation towards them giving that information to us, and that was really good for us.
Mike: Right. Yeah. Just like even when we mail like let’s say probates for example, we never say, hey, we know that somebody died here. We just say we happen to be buying houses in your neighborhood. We don’t have to tell them exactly why we maybe targeted that house. Awesome.
So what would you guys say for somebody listening right now, they’re like, “Hey, I get this.” Maybe I have a limited budget, so staying really focused will be good for me anyway, and they’re excited about this. Sometimes we could end the show here and people will be like, “Wait a minute. What do I do next?” So I want you to help me answer that question. If they were looking to get started or they hear this, maybe they’ve been an investor for a while and they’re like, “You know what, this mass approach isn’t working. I need to get really targeted.” I know your answer is probably going to be that it’s going to start with getting the data and understanding the data. But where does somebody . . . why don’t you tell us in your own words, what does somebody go do, like right after they hear this, to go get things rolling?
Jesus: I think the first approach will be go get the tax delinquent from the county directly, get the previous year’s delinquencies as well. Put them together and then you can see properties that are one or more years delinquent in taxes. That right away is a good indicator that somebody is distressed. If they owe two or three years of taxes, it’s pretty possible that they are going through something wrong or some distress of any type and then go after the phone.
Prioritize them based either distressed or the areas. If it’s a good area, you should target the ones that are better areas than the ones that are bad areas and go after them, proactively go after them. The main thing go. You could skip trace, right? Of course, there’s services about skip tracing. There are several services out there right now that are about skip tracing. Make sure that you pay a good amount for it because you get what you pay for. If you go for the cheapest one, you might get a lot of wrong numbers and stuff like that. But yeah, being proactive, the tax delinquent data is the main one.
Felipe: It’s like a spine for us, for our motivation.
Jesus: The code violations as well. That requires a lot of work. But if you put in the work and you get that information, I guarantee you that you’ll have an advantage over all the broad approaches of this.
Felipe: I like to think about it this way. If you can have a $1,000 today to get started in this business and you can send, what is it, 1,000 mailers and just wait, it’s like throwing a line and see what sticks, or if you, again, you can just be more of a hunter approach and do that work on the front end. It’s tedious because a lot times when you go to like an public administration office, they’ll look at you like a weirdo. But again, it’s public information. They have to give it to you. Consolidate that data. And even if you’re not really good at Excel, there’s people that do that on Fiverr. There’s services that do that for you. And then just pick up the damn phone. It’s that simple.
Mike: Yeah. So one last thing. About picking up the phone for people that are uncomfortable with that or at least to get started, it takes a level of confidence to get started, and then sometimes people will get a couple of nasty calls like, “Don’t ever call me again. I’m going to come kill you.” Whatever somebody might say. Sometimes people just give up. They’re like, “Oh my god, I hate that.” But give a little bit of guidance to kind of getting comfortable with being on the phone.
Felipe: I mean, there’s no way around it. Cold calling is extremely uncomfortable. Get over it. Think about it this way. I’m not talking about a big spread. On average nationwide, it’s like $17,000 for assignment or for whatever. So every no that you get on the phone, even if it’s a nasty no, it’s going to get you closer to a yes, to your next deal.
Jesus: You’re always one call away from a good deal. I would say that if you’re terrible on the phone . . . If I didn’t have Felipe on my side to be doing the calls and starting that process, right, I wouldn’t be able to do it. I would hire somebody. You can probably go to Upwork, OnlineJobs.ph, or any of those service providers or even outsource the whole service of cold calling, but that would be more effective. You can filter it out to somebody else who has past experience of doing cold calling. But again, you can’t shy away from the phone. The phone is not a cactus. It’s one call away from a good deal.
Mike: That’s awesome, awesome. Well, if folks want to learn more about you guys, where could they go?
Jesus: I mean, they can send us an email. Our website is under construction. It’s a little embarrassing.
Mike: I know you guys don’t have anything for sale. So yeah.
Jesus: No, we are on Facebook, of course. If you’re going to put it in the show notes, you can put our email. Mine is email@example.com, and Felipe’s is firstname.lastname@example.org. It’s going to be in the show notes or just look it up on social media.
Mike: Yeah. We’ll add some of your Facebook profile links down in the show notes here. Awesome, guys. Hey, thanks for sharing with us today. This is good stuff.
Jesus: It’s an honor being here. I always follow your show.
Mike: I appreciate you guys. We haven’t mentioned it yet, but you guys are obviously Investor Fuel Mastermind members. It’s awesome having you guys in the group. You guys are doing some unique stuff. Your relationship is impressive too. So a lot of people that are partners, there’s a lot of infighting and stuff like that. But you guys are clearly very close, so I appreciate everything that you bring to the table and thanks for sharing everything today.
Felipe:Thank you very much.
Jesus: No, thank you for hosting these shows and organizing the mastermind.
Mike: Hey, I’ve only done this on a couple shows now, but I kind of like it. Any quick little plug for Investor Fuel? You guys weren’t expecting this, but just thoughts on the mastermind and maybe how it’s kind of opened your eyes to what’s possible out there?
Felipe: For us, the biggest plug was that when we first joined, when we went for the first time, we weren’t sure of what to expect, because you know there’s a lot of noise out there and a lot of masterminds and you hear about bigger masterminds that you were part of before. But here it’s truly what you feel is that there’s a go-getter mentality. Nobody holds stuff back, and the group itself, I mean, the Elite group, it’s turning into an extended family. We’re excited about the trip in February, like going skiing together and all that. It’s going to be amazing.
Jesus: Yeah, I mean, the connections. Everybody is so open about it, right? You can have an honest conversation. There’s no egos involved there. We feel really comfortable with the Investor Fuel Mastermind. For us, it’s been really, really good.
Felipe: I will say that to kind of segue into the last question, what would be your advice for people that are getting started, what we just talk, but after you reach a certain level of success, once you know you are doing deals and it’s proven to work, you need to join a mastermind. You need to like actually connect with people that are, you know, high achievers, people that actually are going to elevate your game because you never know, like sometimes, you know, like the solution to the problem might be right there in front of you.
Jesus: You just need to hear it from somebody else. Somebody might be going through the same challenge, and you hear it and it opens your mind. It’s inspiration.
Mike: Yeah, absolutely. Awesome. Guys, hey, thanks again for everything.
Jesus: No, thank you, Mike.
Felipe:Thank you. Take care.
Mike: Awesome. Hey guys, this was show number 441 with Felipe Boss and Jesus Toledo. Really awesome guys doing some great things. Hope you enjoyed today’s show. If you haven’t yet, please subscribe to us on Stitcher Radio, iTunes, Google Play, and anywhere else where you could possibly watch us at, YouTube. And of course, you can see all of our shows and listen to all of our shows on FlipNerd.com. So we appreciate all of you guys. We’ll see you on the next show.
If you’re an active real estate investor already doing deals and looking to double or triple your business, you should consider joining the Investor Fuel Real Estate Investor Mastermind. We’re a small group of investors that share our best practices, tips and tricks with one another in an effort to all win. Real estate investing can be a lonely business for successful real estate investors, but it doesn’t have to be. Investor Fuel members meet four times a year, but we talk to each other 365 days a year, and we focus on improving the profitability of our businesses, improving the quality of our lives, that’s why we do this right, and making an impact on those around us, so we can truly leave a legacy.
We limit our membership to only one to two members per market, so everyone shares their knowledge, tips and tricks openly and honestly. Our members include some buying one to two houses a month, up to some of the most respected investors and leaders in the real estate investing industry, some of which have personally done over 1,000 deals. If you’d like to be considered for our invitation-only, world-class mastermind, please visit investorfuel.com to request your personal invitation. Our next meeting is coming up quickly. Go to investorfuel.com now to learn more.
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