This is episode #338, and my guest today is Brian Ellwood. Brian and his partner are doing around 75 deals a year in Middle Tennessee, but doing it all from their homes in Denver Colorado.
Today Brian shares the importance of Marketing and Lead Generation for your business, as it’s truly the lifeblood of your business. There are some great nuggets in today’s show…so don’t miss it.
BTW – this is the first show EVER that I’ve actually recorded LIVE via Facebook Live. FlipNerd Elite members were able to watch live from within our private facebook group, and were able to ask questions LIVE after the show was recorded.
In fact – all of our shows will be recorded Live from here on out, and only FlipNerd Elite members will have access to participate. Of course, the shows will still be added to iTunes, Stitcher Radio and FlipNerd.com as well, usually a couple weeks after they are recorded.
But now…let’s join the show. Please help me welcome Brian Ellwood to the show.
Mike: This is the www.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 and believe in personal responsibility and taking control of your life and financial destiny, you’re in the right place. This is Episode 338, and my guest today is Brian Ellwood. Brian and his partner are doing around 75 deals a year in Middle, Tennessee, but doing it all from their homes in Denver, Colorado. Brian shares the importance of marketing and lead generation with us today, and it’s truly the lifeblood of our business. There are some great nuggets in today’s show, so you do not want to miss it.
By the way, this was the first show ever that I’ve actually recorded live. The 337 episodes before this were done the old-fashioned way, I guess, but we recorded these live via Facebook Live. FlipNerd Elite members were able to watch us live from within our private Facebook group and were able to ask questions live after the show was recorded. It was actually pretty cool.
In fact, all of our shows are going to be recorded live from here on out, and only our FlipNerd Elite members will have access to participate. Of course, the shows will be still be added, ultimately, to iTunes, Stitcher Radio, www.flipnerd.com, and a lot of other places as well. That’s usually a couple weeks after the shows are recorded.
If you’re interested in watching us live on another upcoming show, typically, one show a week is recorded, as well as all the other benefits of a FlipNerd Elite membership, we have an opportunity for you to try out our FlipNerd Elite membership for just $1. If you want to learn more, please visit www.flipnerd.com/trial.
Now let’s join the show. Please help me welcome Brian Ellwood to the show. Everybody that’s watching right now, this is the first time we’ve actually done my Expert Interview show live, and we’re planning to do it that way going forward for our Elite members. Everybody that’s watching this right now is an Elite member. We’re only broadcasting this in our Facebook group. Some people will be watching this after the fact.
This is Episode 338, and just to lay some ground rules here for those of you that are watching, our intention is that we’re going to have a final product that’s much like the show has been for the 337 episodes before this. Essentially, we’re not going to pay too much attention to you while we’re recording the show, which will last about 30 minutes or so. At the end, we’re going to open up to Q&A with Brian here, the mountain man who is going to share some great knowledge with us today. It’s going to be a great topic. What we’re going to do is I guess it’s like you’re watching a show be recorded, like a television show. We’re recording in front of a live studio audience. We’re going to see you out there, but we’re going to not interact until the end. I hope that makes sense.
If you have any questions, type them in, and we’ll get to them at the end of the show. Even if you’re watching this afterwards, type some questions in, and I’ll check it and see what I can do to answer questions, and maybe Brian will check the group as well for the next day or so here and see if he can respond to any questions you have. Does that sound good, everybody? Awesome.
Brian, welcome the show, my friend. Brian: Thanks for having me. Mike: Yeah. It’s great to see you. I’m envious because we went skiing I guess about a month and a half ago. You live in Denver, and you said you do that a couple times a week. That is incredible. Brian: Yeah, you need to make it out here more often and visit me. Mike: Yeah. I will say that I had not been skiing in a long time, so it showed, for sure. I felt it for a while. Brian, I’m really excited to talk about this topic today of why new investors and maybe even veteran investors should spend 80%, a dominant amount of their time, actually, on lead generation activities. I think that’s not what most real estate investors do, especially new folks, because they just don’t quite make the connection yet that that’s what drives the entire business. If you don’t have leads, you don’t have a business. It’s going to be a great subject to discuss with you. Brian: Yeah. I’m looking forward to it. Mike: Yeah. Hey, before we get started, Brian, tell us a little bit about you and your background and what you do now. Brian: Yeah, sure. I’m originally from Tennessee. I grew up there and went to the University of Tennessee. I got my degree from there. I spent a few years in the corporate world and realized that wasn’t for me. I went out into the entrepreneurial world. I was very desperate for an alternative. I met a mentor who fixed and flipped houses. He took me under his wing and taught me how to do what he does. That was about four years ago. I went out on my own after working with him for about a year. Mike: That was in Denver you were doing that, or that was in Nashville?
Brian: Nashville. Mike: Okay. Brian: Yeah. Our business is actually across all of middle Tennessee. We invest. My business partner and I actually live in Denver, but we weren’t able to do this overnight. We built a team around us that could fulfill our product. Basically, what we do is we rehab houses, but we don’t do expensive rehabs. It’s more or less $10,000 or so, the first $10,000 if necessary. We put it back on the market. Our primary buyers are people that want to move into the house and do the bigger renovations themselves. Mike: Sure. Brian: We built a team in Nashville that fulfills that. We have acquisition managers, project managers, etc. We got the business to the point where we could run it from our houses in Nashville and decided to test this theory by moving to Colorado and seeing if we could still run the business. That was two years ago, and we still run our business virtually from Denver. Mike: Yeah, that’s awesome. It’s funny. For those of you that are watching, I asked Brian. I know his arrangement but wasn’t aware of how often he goes back to Nashville. I said, “How often do you go back to Nashville?” And he said, “Christmastime.” I know people that invest in other markets. They have a tendency to still go there once a month or do other things, but you guys are totally off the grid, which is cool. Brian: Yeah. We probably should go more often. We probably would be able to accomplish certain things if we did. We have a couple dozen rental properties there in Nashville. When we do go in town, we check on our rentals and whatnot so we can write the trip off, but most of the time when we go it’s to visit family or friends and hang out with employees a little bit. Mike: Yeah, cool. Well, let’s talk about lead generation. You and I both know and all veteran investors know that it’s a funnel. The more you put in that funnel, the more that’s going to come out, to say it simply, but I think a lot of newer real estate investors don’t really realize that you have to invest in your business. You’ve got to generate leads for anything to come out the other side. I think it’s because all the TV shows and all those things, they talk about real estate investing, but they never talk about how you get the product. It’s always just assumed that, “Well, you just go grab one. They’re all over.” It’s not that easy, right?
Brian: Right. It’s very easy to get distracted by the product itself and to drown in the process of monetizing the deal that you got and to be all concerned with, “Which backsplash am I going to put in this kitchen to get the best sales price?”
Mike: Yeah, before you’ve even bought it. Brian: Yeah, and that is a business model. There are people who don’t do any marketing. They buy everything off the MLS or from some other source, and they make good money, but I think we and most of your listeners want to build a business that operates from start to finish, right?
Mike: Yeah. Brian: They want to generate the leads. This idea of 80% of your time and resources on marketing and sales, I got it from a great business book. It’s called “Ready, Fire, Aim” by Michael Masterson. This guy is one of the Sharks on “Shark Tank.” He’s at that level of business, and that’s one of his greatest lessons. It took me a long time to really learn this lesson.
Just to break it down for your listeners really simply, what a business looks like, it starts with marketing, and that generates leads, and those leads get converted to sales. Then the sales create revenue. They create income for your business. The income can be used to hire new people to grow your business. You have to deliver the product, so you have to build systems and processes to support all the activity you generated. Of course, you have to invest some of that revenue back into marketing.
At the end of the day, that revenue that comes in is the driving indicator. If you’re a rock star at marketing and sales, you basically have your finger on the dial of your business growth. You can control whether or not your business grows if you can control your marketing and sales.
Marketing and sales are the lifeblood of the business. It’s what feeds the business. No business has ever gone out of business because they didn’t have a set of shiny MacBook computers to give their team, but businesses go out of business all the time because they run out of money. Mike: Yeah, or they don’t have customers. Brian: Exactly. Mike: Or leads, effectively, yeah. Brian: Right. Mike: What’s interesting is that I think a lot of newer real estate investors get started, and they say, “I want to be an investor.” They have the interest in being a real estate investor, but they don’t think of this. “How I’m going to find deals,” comes up after they’ve quit their job or after they made the decision to start doing it. It’s like, “Well, you’ve totally put the cart before the horse. What are you going to do to drive your business?”
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Brian: Yeah, absolutely. Generating leads needs to come first and foremost. Really, if you can get a contract signed, then you’re the one that has the gold. How you monetize that is relatively simple. If I gave you 100 signed contracts today with nice profit margins built in, I bet you could figure out how to monetize those deals. You could scramble to build the processes and hire some people to help monetize 100 signed contracts all at once. It would be a mess, but you could do it.
I’d argue that getting those contracts in the first place is the hard part of the equation. Mike: Absolutely. Brian: Once you’ve got them, it’s not. To your listeners that are just starting out, one example that registers with me that they might also register with is how many times have you seen a musician or an artist who’s really talented at what they do, but they haven’t made it? You go to a dive bar, and some guy’s playing guitar and singing, and you’re like, “Man, this guy’s so good. Why hasn’t he been discovered? Why hasn’t he made it?”
It’s because he’s not marketing himself and selling himself. He’s got the raw talent, but he does not know how to get out there and do it. That is the biggest mistake that any entrepreneur makes when they first start. They avoid the marketing and sales part of the process because it’s scary, or they don’t understand it, or they have a negative stigma like a used car salesman. “I don’t want to do sales. That sounds negative.” There are a lot of reasons why people avoid it, but it is the number one reason that entrepreneurs fail. Mike: Yeah, and the interesting thing is there’s this chasm of, “I’m a guy with a truck. I’m one guy that’s doing this. I’m doing the buying. I’m answering the phone. I’m doing everything myself.”
What starts to happen is, first off, until you start doing deals, and we’re going to talk about how to get leads here in just a minute, you don’t have the money to invest in a team, necessarily. If I were to go start a factory, I would need millions of dollars for equipment and machines and all this stuff.
I’m not saying that real estate investors can’t start with nothing, because I know a lot of people that did, and they’re very successful, and I know people that started with a lot of money, and they just pissed it away because they weren’t scrappy enough. Not that that’s the answer to everything, but it’s so much easier if you can invest in your business up front.
I came in that way just because I bought originally into a franchise. I understood that. They had requirements. I had to have an administrative person. I had to have a physical office. They wanted you to operate like a business, but I think the problem is a lot of people that get started on their own, they have the intention to grow into that. They just never get past themselves where they’re doing every single thing, and then they forget to do the advertising, or they didn’t get the mail in on time. You’re just spread so thin that you can’t do it all. It’s getting to that point to where you can reinvest back in your business and add some capacity to really, truly become a business instead of just a job for you, right?
Brian: Yeah. You’re reminding me of the message that’s in the business classic, The E-Myth Revisited, by Michael Gerber. Mike: Yeah. Brian: If anyone listening hasn’t read that, you might as well just hit pause on this video and go grab that book. You have to adopt the mindset of a business owner and not an employee if you want to be truly successful as an entrepreneur, and that’s not easy to do. I know a lot of people that relentlessly cling to every part of the process. They’re over there painting the cabinets themselves and stuff. You have to realize that you can pay somebody $12 an hour to paint cabinets. If you’re choosing to paint the cabinets, then you’re choosing to save $12 an hour, which, in essence, means paying yourself $12 an hour. You’re telling the world that’s what you’re worth, basically.
It’s very, very important, and I know this is a little different from our topic on marketing and sales, but it’s very, very important for you to determine what your unique ability is and focus on actively quitting everything else as fast as possible. Mike: Yeah. Until you do that, you can’t grow. You can’t think about growing. You can’t do a lot of the things that you started that business to do in the first place. You wanted freedom of time. You wanted financial freedom. You wanted those things, but you’re your own bottleneck, right?
Brian: Absolutely, and I’ve preached this a lot. I think that when you’re going into any kind of entrepreneurial endeavor, the main thing that I’ve heard in all the surveys and things that entrepreneurs want when they go into business for themselves is to create freedom. They want to be able to do what they want when they want. You’re probably no different. You want to be sitting in your FlipNerd office doing this right now. You don’t want anyone telling you what to do, right?
Mike: I’m with Brian now. Don’t take that away from me. Brian: You’re what?
Mike: I’m with Brian right now. Don’t take that time away from me. Brian: Exactly. It’s very important to start out with the lifestyle, the day-to-day lifestyle that you want to live, and back into that rather than just go crazy and work 80 hours a week. That’s not really necessary in the beginning. Mike: It’s not sustainable, at least, yeah. Brian: Right. Mike: Let’s jump into leads. We know leads are important because they fuel everything. What’s a little bit harder is how to get them. One thing I wanted to do is talk about it. I know you’re going to share some different ways to generate leads and some things that you guys do, but break it apart into the stuff that’s truly scalable, which is typically paid advertising, direct mail, pay-per-click, and some other things that you can essentially write a check for, ultimately. The next month, you could double that check or triple that check. You could ramp up significantly. Then more of the stuff for people that are getting started or the stuff that’s just more of their time and their sweat equity that they’re putting into it, whether it’s hustling to network or whatever those things might be. Do you want to break it down that way? Maybe we could start by talking about some of the things that are not expensive, per se, other than your time or your own elbow grease. Brian: Yeah. One idea that comes to mind is to build a network of referrals or a referral network, I guess you would call it. That can consist of wholesalers, property managers, attorneys, realtors, and anybody who would basically come across deals, right?
Mike: Yeah. Brian: That’s an email list that you need to reach out to. Just like growing an info business, the bigger the list, the more response you get and the more money you make. Every Tuesday morning, you can send an email out to that entire list blind carbon copy, “Hey, I’m looking to buy. Got anything?” You stay top-of-mind. One week, somebody doesn’t have anything, but then the next week, “Oh, yeah. I just talked to this lady down the street, and she is looking to sell next month,” or whatever. You’d be surprised how many leads you can get just by asking people. The email way is a way to scale that without actually, literally calling every person every Tuesday. You don’t have time for that. Mike: Sure, yeah. You can make a lot of communications look personalized today by doing it en masse. That’s something that I’ve taught on for a long time. In fact, we just launched our coaching program. I created some training around this specifically about looking for ways to benefit that person as well. Every realtor in town has heard, “Hey, I want to work with you,” from an investor. They get that a lot. What can you do to add value to them to where it’s tit for tat and not just one-sided? Without getting into too much discussion there, I think, for folks listening, that’s a great way when you’re networking to think about how you can add value and not just extract value from other people. Those relationships don’t last all that long if they ever even start. Brian: That’s very important. Mike: Yeah. It could be things like, “If you find deals on the MLS or HUD houses, bring them to me, and you could represent me.” It could be, “When I list my properties, I’m going to ask you to list them for me.” There are a lot of things like that, I guess. Brian: Yeah, absolutely. You have to reciprocate, but people will give you leads for nothing just to help the person. A property manager, for example, they’ll have problematic properties that they manage that they really hate managing because the property is crappy and always goes vacant. They want someone to buy that thing just to take it off of their plate. They’ll tell you about it. An attorney who handles divorces or probate or inheritance will tell you about the lead because they want to help their client out too. But I like what you said. You definitely want . . .
Mike: For sure, yeah. Let’s talk about some of the paid ones. Some of them are obvious, but maybe share what you guys do without giving away your trade secrets. Brian: Oh, I don’t mind giving away everything. I’ll say one last thing because I don’t want to gloss over the free stuff too much. Follow-up is extremely important. Even if you have 30 leads and literally just got started, those 30 leads are your gold right there. Keller Williams did a study where they found that 80% of deals come from anywhere between the sixth and twelfth touch. Six to 12 times is necessary to get most of your deals. If you’re only talking to somebody once and they’re saying no and you’re never contacting them again, you’re leaving 80% of your profit on the table, basically. Mike: Yeah, absolutely. That’s one of those things, too, going back to when you just get started. You need to realize what you’re good at, for one. For example, for myself, I’ll say what you’re good at and what you have the capacity to do.
It’s kind of a classical problem for sales-oriented people and salespeople to say, “I need more leads,” instead of working the ones you have harder, especially if they’re not paying for the leads. I’ve had sales guys before, and they’re like, “Man, we need more leads.” It’s like, “Well, what about that massive list you’ve got right there?”
Also, I usually teach people this. Here’s what I know. We bought a house last year, for example, in the past year. We bought it 54 months after we made our first offer. Brian: Wow. Mike: We followed up monthly. I had every touchpoint, and usually, I called and left a voicemail, called and left a voicemail. Sometimes the number was disconnected. We have virtual assistants that do all of our follow-up. I wouldn’t follow up 54 times. I would be like, “Man, I’m not going to call this number again.” I would just give up after a couple of tries, but I know that about myself. I have outsourced that because I know that I’m not the right guy to do it. You’ve got to get a team built or have some resources to be able to help you with that. Brian: Yeah, and I feel like we should mention this just for anybody that’s just getting started. We’re talking about marketing, but if you don’t have an acquisition manager yet, that is an absolutely crucial hire. Acquisition managers will work on a commission-only basis because they make a decent percentage of the deal. They can make good money if they can bring in the contracts. You could hire an acquisition manager and just pay them draw if they need it for 60 to 90 days. Then that drops off. From then on out, they don’t cost a thing unless an actual closing happens.
Money comes into the business. That person is basically your live follow-up machine. They’re really good at it because they’re a professional salesperson. You want to get them some kind of training. We’ve highly automated. We’ve done texting, email, and voicemail blasting follow-ups. You can systemize all of that, and it’s really powerful.
There’s a business logic that says that no matter what niche you’re in, only 3% of the market is actually interested in what you have to offer. The other 97% don’t care about you. They’re never going to need your product or service. Those people that have raised their hand from your direct mail or whatever efforts you’ve already made are part of that 3%.
Mike: Sure. Brian: They are much more likely to become a deal than anyone else. You have to treat every lead like gold. Mike: Yep, absolutely. Let’s talk some more about paid leads, stuff that’s a little more scalable, stuff that people that are doing a lot more volume tend to rely on. Brian: Yeah. Everyone has heard that direct mail is the king of marketing in terms of real estate. I would agree with that. It’s been our bread and butter for the last four years. Inexpensive post cards, you can get them for 30 cents to 40 cents each, and that includes first-class postage so they can be there in two to three days. We’ve had the best luck focusing on niche lists like a probate list. A list of vacant land has always been pretty profitable if that’s something that you can make money on in your market or lists of people who are delinquent on their taxes. I’ve talked to other investors in our Mastermind, for example, who have said, “Probate and tax-delinquent are our highest-ROI lists. We get 5,000% ROI on those lists.”
Obviously, you have absentee owners, but at the end of the day, I can just tell you from experience that we’ve always made somewhere between 8 to 10 times what we spend on direct mail back in revenue. That’s one extra thing to say about marketing is that marketing is not really an expense. It’s an investment. Mike: Sure, yeah. Brian: If you do it right, it provides a return. I’ve actually heard successful investors say, “I’m a marketing company. I invest in marketing, and that makes me a return. I’m not really investing in houses.” That’s an interesting way to look at it, but it’s true. Mike: Yeah. I think that way a lot. Real estate happens to be my widget, the product I focus on, and all of us focus on that because it has the opportunity to get some big paydays, but at the end of the day, I think most of us are marketers and operations people. Real estate happens to be what we’re making in our factory, right?
Brian: Yeah. I’ll say another thing that you can add to all of your marketing efforts. In fact, you really should. It’s called a USP or a UVP, which is a unique selling proposition or unique value proposition. That is what makes you different from all of those other people out there. Direct mail, for example, is really competitive nowadays. If you’re just another dude who has a postcard hitting their mailbox that says, “I buy houses,” you basically have to cross your fingers and hope that they pick yours out of the pile. Mike: Right. Brian: Right? You probably watch “Shark Tank” when some guy comes on there, and he’s got some surfboard that you can work out on. The Sharks say, “Why is yours better than all of these other people out there? ” He’ll say, “Well, mine’s made of this material that bends with your movement, and it’s patented. It’s better than the rest.” That right there is actually good enough because they have a distinguishing characteristic to them. Mike: Sure. Brian: If you deploy marketing and send sales guys out in the field and you don’t have anything that makes your business special, it’s like they’re fighting without a sword. They’re trying to convince people to do business with them with no reason why they should. Mike: Yeah, so what would you say? We didn’t talk about this up front, but you guys are doing a fair bit of volume, right? Can you just give an idea of your annual volume?
Brian: Yes. I’d place it somewhere around 75 deals a year, well over [inaudible 00:28:51].
Mike: Yeah. What would you say your unique selling proposition is for the purpose of an example?
Brian: Absolutely. What we focused on is just adding a lot of value to the seller in the closing process. We do all the traditional things like pay closing costs and no realtor commissions and all that stuff, but we go above and beyond by paying for any attorney needs that the seller has. We pay their property taxes in full at the closing table. We will negotiate and pay off credit card debt and liens for the customer. We’ll cover their moving costs, etc. Mike: Wow. Brian: You line up all the options that the customer has. Guy number one buys houses and closes fast. Guy number two buys houses and closes fast. Then you’ve got guy number four who does those things plus eight other bullet points. It’s an easy decision for the customer. Mike: I’ve never heard of anybody that does some of these things that you guys do like negotiating credit cards or moving costs. I’ve heard of people doing moving costs before. You have to put some maximum value on that, right? If you have $1 million in credit card debt, you’re not going to be able to help. Brian: Right. We try, yeah. Mike: Yeah. What if you had a foot massage at the closing table? That would be unique. Brian: Yeah, or a free 60-inch. Mike: A lot of the sellers that I’ve had, though, I don’t want to touch their feet. Brian: Yeah. The USP needs to be simple and easy for the person to understand, and it needs to be memorable. From what I’ve read . . .
Mike: It needs to be relevant. Like you said, all of these things that you listed here are things that will help get a person out of the house, but a lot of folks that we deal with have other financial issues going on or other debt issues, so these are all very relevant to that transition they need to make to improve their situation, right?
Brian: Yeah, exactly. Mike: Yeah. That’s awesome. How do you say that? How is that clear? How do you represent that on your marketing, when you answer the phone, and when you go on appointments? I’m guessing that you find a way to put that across the board where it’s very clear, “This is what we do.” Can you maybe share some thoughts on how you share that message with prospects?
Brian: Sure, yeah. It’s literally word-for-word in our direct mail copy. Our postcard might say, “Every homebuyer makes you the same old promises. ‘We pay cash. We close fast. We pay your closing costs.’ Well, let me tell you. That stuff is easy. Here are all the other things we do,” and it lists the eight bullet points. That’s literally what we’ll send out to people, and then it’s included in our sales process when the acquisition manager goes. One thing we do is we created a free eBook that tells customers everything they need to know before selling their house like checklists to choose the right person to sell it to, a checklist to go through before you come to the closing table, all of the things to think about before you move, people’s phone numbers and resources, and we advertise a free download of that as well.
We want to position ourselves as a very helpful homebuyer at our core. It might be in an email drip campaign. It might be a video about how to sell your property to an investor the safe way or something like that. It’s just everywhere. Mike: Yeah. That’s awesome. I would say, generally, most real estate investors I’ve seen have nothing in terms of marketing, marketing collateral, branding, and stuff like that. They’re just a guy in shorts and flipflops who’s in and out. He just wants to look at the house. He doesn’t want to build a relationship and doesn’t want to talk about adding value. It’s more about what the seller can do for them. Brian: Yeah, exactly. Mike: Yeah. Awesome, man. I know you’ve talked a lot about helping your sellers, people that are selling to you, and adding a lot of value there. I know we were also going to talk about, in the context of marketing and lead generation and why it’s important to spend a lot of your time there, that you wanted to talk about getting to know your buyers better and trying to learn what the market is looking for so that you can serve them, right?
Brian: Yes, absolutely, if you’re talking about the customer. Are you talking about the sellers or the person that buys it?
Mike: People that are buying, people that you are ultimately selling to. You talked about profiling what people are looking for, how the process was of buying from you, some of those things we talked about right before we started today. Brian: Oh, yeah. That was something that I wish I would have done from day one. The moment we purchase somebody’s property, we give them a call and do what we call a customer development interview, which is where you would gather, first of all, their demographic information like age, income, ethnicity, what types of media that they consume, what TV channels they watch or radio stations they listen to or newspaper and then also what they call psychographic information, which is how they think.
What were their major fears going into doing business with an investor? What were their desired outcomes? Then you probably should incentivize them with a gift card or something for their time for doing that for you. Mike: Yeah. Just to clarify, this is for sellers that you’re buying from?
Brian: Yes. Mike: Okay, got it. Brian: If you were talking about the people we end up selling the property to, it’s listed on the MLS. It goes retail. I don’t actually know much about that customer. Mike: Right. There’s an agent in the middle, yeah. Brian: Right.
Mike: Brian, maybe we could just talk for a minute to folks that are listening to this. It’s always hard. We have so many listeners for the show now. Thank you if you’re listening. Maybe you could share some tips for the person that’s listening that hasn’t gotten started, but they plan to soon, or the person that is starting, but they’re struggling to do any significant volume to get themselves out of, essentially, the job they’ve created for themselves. Maybe for those two different profiles, you could share some thoughts on how people can start to spend more time on their marketing. I don’t want to take that lightly and just say, “Well, just spend more of your time on this,” because you’ve got to figure out what you’re going to do less of. Spend more time on lead generation activities and maybe some words of wisdom on how they can hear this today and then go change things tomorrow. Brian: Yeah. That’s a great question. I think you want me to give you specific marketing strategies, and I keep going high level on you. Mike: No, that’s fine. It’s about a 30-minute show. Brian: Okay. I do believe that a lot of does come down to mindset and taking massive action and going through that period of being scared and needing to have courage. I literally quit my job and just dove in with both feet. I didn’t have an exit strategy, and that actually worked out better for me because there was an amazing amount of pressure on me to make it work. It was to the point where my girlfriend had to pay the mortgage and stuff. It was really stressful. That actually pushed me to take the action.
If you’re talking about specific things that somebody can be doing to generate leads, I can tell you a really simple strategy that worked for me. I got my first maybe 10 deals this way. I would just drive around and write down the addresses of ugly houses in my neighborhood. I would go home and handwrite yellow letters to them and take the calls personally. I would go over there and get the property owner contract.
All I paid was for the letters I sent out. I probably sent out 50 to 100 a week, and I would just literally drive all the time and canvas every single street in the whole city, and I had a massive driving-for-dollars list. The beauty of building that list is you’re really cherry-picking the properties that are most likely to sell to you because they’re in bad shape. Mike: Sure. Brian: Whereas if you buy a list online, you have no idea what shape they’re in. Mike: Right. Brian: I think that’s a great strategy for people. If you want to just have a little bit of something to get you going, set a goal. “Every day, I’m going to get 25 new addresses, and every week, I’m going to mail a minimum of 100 letters,” or something like that. Mike: Yeah. It’s an important thing, I think, for newer people to set those small goals. Sometimes you’re like, “I just want to get a house.” Set some stepping stones to get there. Just commit. “Every day, I’m going to get 10 of these or 25 of that, and this is my goal for the week.” Then hold yourself accountable. Now that you’re self-employed or trying to be and trying to make this work, you’ve got to hold yourself accountable for these small goals. Eventually, you’ll be able to hold people on your team accountable for those same types of goals, right?
Brian: Yep, absolutely. Mike: Yeah. Brian: Offers made is another one. Follow-up calls made is another great thing that you can set a goal for yourself and track. Mike: Yeah. Especially when you become self-employed or you’re doing this on the side and trying to get something going, it’s easy to be inefficient because we’re distracted by social media, or we’re distracted by all of these things. I think until you have some goals written down and defined, almost like a little scorecard for yourself or your team, ultimately, it’s easy for weeks or months to go by, and you haven’t really done a lot of productive things. Even though you were busy, it just wasn’t stuff that was helping you generate more leads or do more deals. Brian: That’s a good point. Even businesses that are at our level or higher, they’re all run by the numbers. We all have key KPIs that we track that determine the business’s success. When you’re just getting started, you’re right. It is no different, and if marketing and sales needs to be your core, you can just set goals for leads generated, phone calls made, appointments attended, offers made, and those precede contracts signed, which is what everyone ultimately wants.
That’s the big goal. It really doesn’t need to be any more complicated than that, just focusing on those activities, getting leads, calling them, meeting them, and making offers. You will succeed if you keep doing that.
But it’s scary. It does not feel good. Do you know what feels good? Staying at home and working on your website and making it polished, but that makes you no money, right? You have to do the scary stuff, and I think that’s one of the main things that hold people back. I was terrified when I first started in this business. I remember I used to . . .
Mike: Yeah, most people . . .
Brian: Go ahead. Mike: I was going to say a lot of people that I know that are successful, they hit bottom at one point with trying things or dead-end jobs or whatever it is. It just got to a point where failure was not an option that they could accept anymore or were willing to accept. That doesn’t mean go live in your car and create an unnecessary hardship. It just means know that and figure out a way to feel that pressure without necessarily having to put yourself in that situation if you can. It’s easier said than done. Brian: Yeah. That is ultimately the biggest obstacle. People think they need the practical things like, “Where do I get the list?” and, “What does the letter say?” What they really need is to be courageous in the face of a fearful period in their life where it’s not going to be very comfortable. You know how you feel when you have to talk in front of people? Everybody feels all queasy and nervous. That’s exactly how it feels to go through what you have to go through to be successful as an entrepreneur. Mike: Sure. Brian: You can’t go around that stage. You have to go through it. The things that you have to do are going to make you feel that way. I’m not necessarily the greatest mindset coach. I can tell people what to do, but everyone has to take that fearful journey on their own at some point. They have to step off into the abyss. Mike: Yeah. That’s awesome, man. Brian: It may be difficult, but that’s how it works. Mike: That’s great. Well, Brian, if folks wanted to learn more about you or follow along, I know you started a blog recently, where can they go to learn more about you and some of the things you’re doing?
Brian: It’s just www.brianellwood.net. You can learn more about me there. I do coach entrepreneurs as well. I’m actually taking on four new students over the next three months. You can also just email me directly at firstname.lastname@example.org. I promise I will give you a reply. I’d love to hear your questions. Mike: email@example.com. On your website there, is that where your blog is at?
Brian: Yep. Mike: Okay, cool. I know you’ve been working on that, so that’s awesome. Brian: Yeah. Mike: Awesome. Hey, thanks for joining us on the show. Everybody, thanks for joining us. Again, this our first live show, so I really appreciate you being here. Brian, thanks for your time. There were some great lessons in there. I hope everybody paid attention and wrote some of those things down, for sure, and, more importantly, will put them in play. Brian: Yeah. I’m really happy to do this interview, Mike. I really respect what you’ve built here at FlipNerd. I love adding value to other people, so I’m more than happy to help you and your team in any way I can and come back on the show whenever you need. Mike: Thanks, man. I definitely appreciate your time, for sure. Awesome. Have a great day.
Brian: All right, you too. Take care. Mike: Yep. Awesome. Hey, everybody. For those of you that are still watching along here, we’ve got a few folks watching, I wanted to open it up to some questions. Again, for those of you that are listening to this or watching this, whether it’s live or after the fact, this is our first live show that we’ve done, and we’re going to do them all this way inside of the FlipNerd private Facebook group. Our intention is to open it up for 10 minutes or so to answer some questions for things we talked about today or any other questions that you might have for Brian. If you have any questions, go ahead and chat them in. If you’re listening to it after the fact, still go ahead and ask your questions, and either Brian or I will try to get to them over the next day or two to give you a response.
Brian, one question that I know we have is you talked about different lead sources. I think a lot of us are operational, and we want to just say, “Okay, probate leads, I’ve got a source, and now I’m done. I’m just going to use that source.” You said you use a lot of niche lists, but can you talk about how you are staying abreast of what’s working and what’s not working and how often you revisit those things to make adjustments if you need to?
Brian: Yeah. Well, a couple things come to mind when you say that. One is to always be surrounding myself with other people who do what we’re doing, so you can stay on top of the hottest strategies that are working in the investing world. Secondly, it would be tracking your ROI on each marketing effort. If you know that you’ve spent $5,000 this year on probates but made $100,000, you know that’s an amazing return, and you know that you could probably afford to spend more. You have to track everything by the dollar amount. Mike: Yeah, and do you use CallRail or a tool like that?
Brian: We used to. All of our calls go through Talkdesk now. Mike: Okay, but you use different phone numbers for your different lead sources, I presume?
Brian: Oh, yeah, absolutely. Mike: Yeah. It’s important to use different phone numbers for your different lead sources, ultimately. You could even use it for the same lead source, whether it’s a letter versus a postcard, anything you want to compare. A lot of tools these days allow you to get, essentially, a tracking phone number for $2 or $3 a month. It allows you to know what’s working and what’s not, right?
Brian: Yeah. If you were going to throw an ad in the Yellow Pages because you thought, “Maybe our customer demographic still reads the Yellow Pages,” the only way you’re going to know if that works is it’s got to have its own, dedicated phone number. At the end of the year, you can just simply compare. “What did that Yellow Pages ad cost me, and how many actual dollars did it generate?” Then decide if it’s worth it or not to continue. Mike: Yeah. Oddly enough, we got something in the mail recently. For years, we get all these Yellow Pages books. I just pick them up and put them in the recycling bin, which is always painful, but this year I think we got something in the mail asking if we wanted a Yellow Pages, like, “Well give it to you if you want it instead of just assuming everybody wants it.” That was an interesting transition, I thought. Brian: You’re saving a few trees, yeah. Mike: Yeah. We have another question. A hot topic these days is virtual investing, being in a different market. You live in Denver, but you invest in Nashville or central Tennessee. What do you call it, Middle Tennessee?
Brian: Yeah. Mike: Okay, so Middle Tennessee. Of course, you started in Nashville, and you had boots on the ground for a while and then built up your processes in order to leave, but I know there are a lot of guys that we know, actually, that are like, “I’ve never even been there before, but I’m going to start investing there.”
Brian: Right. Mike: There are a lot of new investors that are trying to invest virtually in other markets where they’re not and, at the same time, having some of the same troubles that we’re talking about with not being able to generate a lot of leads and things like that, which probably exaggerates the poor performance because you’re not actually even there. Anyway, do you want to share some thoughts on investing virtually for those that are new or newer and whether that’s something you think they can overcome easily or ways to make that easier if that’s what they want to do?
Brian: Yeah. There’s a lot that you have to figure out. It’s entirely possible for anybody to do. I would say that the more complicated your backend strategy is, the harder it’s going to be. If someone’s just a wholesaler, they could probably invest virtually pretty easily. If you’re going to do extensive rehabs or new construction, it’s going to be harder to do that, obviously, from afar. Mike: Right. Brian: One of the reasons we could move away from Nashville and Middle Tennessee but still invest was because we understand that market. We know all of the pockets that are hot and the ones to stay away from. If I were just going to pick a market out of the blue, like, “I’m going to invest in Cleveland, Ohio,” I would need to talk to people there that really understand that market, and they could tell me what zip codes to focus on and which ones to stay away from. That would be one of the first steps. Then you could start focusing your direct mail efforts on the areas that matter.
Values are important too. What is a property worth in that market? Sometimes it’s not quite as easy as just looking at the ARV and doing your standard formula. There are weird things about markets. “Oh, that’s in a bad school zone,” or, “That area is hot because they’re about to add a Whole Foods,” or something.
You have to surpass that learning curve if you’re talking about a market that you don’t understand. We had a unique scenario in that we moved away from a market that we already did understand. Mike: Right, yeah, and in some markets, especially in the northeast and some densely-populated markets, one block to the next can be night and day. Where I’m at in Dallas, it’s clearly a different neighborhood across main thoroughfares, but it doesn’t usually change dramatically from one street to the next. In older, more densely-populated areas, that’s a very real situation, so you need to be aware of where the lines are, right?
Brian: Yeah, and those areas, in my experience, are the hottest areas to invest in, the areas that are gentrifying, the areas where you have a new house going up and five streets away it’s really rough houses in really bad shape. You should buy houses five streets away if you can. I’ve made the most money from our rental portfolio from buying in areas that were sketchy, but there was a lot of new development 5 to 10 streets away.
Those are the areas that I would actually be looking for to focus on first if I was going to invest virtually. You always want to start by scooping the low-hanging fruit and then making sure that works before you scale and expand to the whole market. Mike: Yeah, that’s great. That’s great information. Well, Brian, is there anything that we didn’t get to cover during the main part of the show that you wanted to share in the last few minutes here?
Brian: Yeah. I have a final thought about why marketing and sales is so important. If you are a ninja in marketing and sales, you will create an abundance of opportunities to choose from. Therefore, you can choose the ones that have the best margins and the lowest risk, which makes everything in your business a lot easier and less stressful. You have healthier margins if something goes wrong. You’re not going to lose money on deals. You don’t enter into deals that are marginal because you’re desperate, which we’ve done many times. We’ve heard so many stories of real estate investors that lose it all or go broke on a big deal that went sour. It’s probably because they entered a deal that they shouldn’t have in the first place because they were a little bit desperate to make money.
If you are a marketing and sales ninja, like I said, you don’t have to do that. You have an abundance to choose from, and you can fill your pipeline with revenue that is safe, predictable, and likely to actually see your bank account one day. Mike: Yep. That’s great. That’s a great tip, yeah. Awesome. Well, Brian, thanks again for spending time with us today. We definitely appreciate it. I’ll tell you. Normally, we’re offline at this point when I record my show, so we’ll just make this public. Your show will be published to the non-Elite members, those that weren’t able to watch it live, about two weeks from today, I believe. Brian: Okay. Mike: That will come out on iTunes and Stitcher Radio. We’ll actually put it on the FlipNerd website. For those of you that got to watch this first version, thanks for being with us. Brian, it was definitely great to see you, my friend. I appreciate your time with us today, and I appreciate you sharing some knowledge. There was some great information in there. Definitely, thank you for being here. Brian: I really enjoyed it, man. I’ll do it again any time. Thank you for having me. Mike: Absolutely. Well, we’ll talk again soon, okay?
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