How to Compete in Real Estate Investing

Mike: Welcome to “Real Estate Investing Secrets.” We’re all looking for freedom and the opportunity to live better, more fulfilling lives, but most of us were trained our entire lives to work for someone else and chase their dreams. How can we use real estate investing as a vehicle to achieve financial freedom? My life is dedicated to answering your real estate investing questions and helping you build an investing business that allows you to change your life and the world around you and to enable you to turn your dreams of financial freedom into a reality. My name is Mike Hambright from flipnerd.com and your questions get answered here on the “Real Estate Investing Secrets Show.”
What’s up, freedom fighters? Hey, welcome back for another exciting episode. This is episode number 465. I’m here with my buddy, Trevor Mauch. Probably doesn’t need an intro but I’m going to let him introduce himself here in just a minute. But we’re going to talk about an exciting topic today. And if you’ve been in real estate investing for a while you’ve seen some changes or some changes going on here in the marketplace and how real estate investors have to stand out.
And the interesting thing is that Trevor and InvestorCarrot probably have the biggest network kind of under one house of real estate investors and even agents now in the country. So they’re really able to identify some trends and things that are going on. That’s what we’re going to talk about today all in the vein for how you can improve your business and how you can compete at a higher level. So hey, Trevor, why don’t you tell everybody who you are if they don’t happen to know who you are yet?
Trevor: Mike, man, I appreciate, dude. It’s amazing. So what episode of this? Four hundred and something?
Mike: Four sixty-five.
Trevor: That’s crazy, man. I thought we were knee deep with the CarrotCast. We’re like at 165. So good work, man. I’m honored to be on here again.
Mike: Yeah, absolutely.
Trevor: So I’m Trevor, Trevor Mauch, the CEO of a company called Carrot and you can find us at carrot.com. But basically we help most of the largest investors, house flippers, land buyers, land sellers, anyone who’s trying to flip properties, high margin businesses, real estate agents generate more consistent, predictable momentum building lead flow online. And so we work with a lot of the biggest ones in the country including people that just do offline marketing and people that just do radio, TV, direct mail, and we help all that give them a better ROI and make them more money.
Mike: That’s awesome. That’s awesome. So we kind of teed it up by talking about some trends that are going on and the market has . . . there’s a market cycle going on that depending on where you are in the country right now you’re having a different experience. But for the most part, the hotness is cooled down a little bit, right? And I think I started investing about 11 years ago. I’d say there’s this general trend, you probably would agree with this, that the market is becoming more efficient, right? Like, if you go back 20 years ago before I was even investing and before you were, before probably Carrot was even around it was more of the Wild West than it is now. It’s probably still a little bit of Wild West but it’s getting more efficient with the likes of Opendoor and Zillow and . . .
I even remember I came from a startup company, not in real estate, just a retail company before I started in real estate and I was like, “Man, there . . . ” It’s like, there’s this technology world and this real estate world, I remember talking about it for years that just hasn’t collided yet. There was no technology for real estate investors. There were no CRMs literally even back when I started. There were just like high rise and these kind of basic off-the-shelf CRMs that people were customizing themselves or they were using Excel, right?
Trevor: Yeah, yeah.
Mike: So there’s been a tremendous change over the years and that’s only going to continue. So why don’t you maybe share some of the big things that you’re seeing in terms of trends?
Trevor: Man, there’s a lot of stuff happened. We had a Carrot summit this past January. You were there as a guest. And it’s really cool being able to interview a lot of big investors from around the country and just kind of figuring out where do they see things going this year or next year for their business. And like you said, there’s differences. Like some people over here are saying, “Oh, we still see the houses appreciating in the next two years but just by less,” or over here they’d already seen a little bit of a drop.
And in general, like you said, I love the word you use “efficient” What happens is inefficient markets over time become efficient. What’s that mean? I’m going to go all the way back to like the 1980s here. Okay. We’ll go back even further. So let’s go back in the 1960s and ’70s. If you look in the stock market, the stock world, the only way that you could buy or sell a stock was to go through someone who had the license, they had the license as a stockbroker, you call them up, at that time there’s no email, you call them up and say, “Hey, I want to buy X amount of things of this stock.” They’d submit the order and magically you’ve got the piece of paper, you got the stock. Okay?
Then what happened was going to the ’80s and computers started to come online, and 1987 there was a big financial event that happened in 1987. And what happened was technology was just starting to get there, but the stock market hadn’t really started to catch up with technology and kind of similar where we were probably about six or seven years ago. And I’m going to show you how there’s parallels and exactly. I like to look at history and I go, “What are parallels? How’s it going to teach us what’s happening now?”
Mike: Exactly.
Trevor: So go back to ’87, the stock market had a big old hit and what happened was a lot of the stockbrokers actually they weren’t taking the phone calls from the people that were calling them saying, “Sell these stocks. Sell these stocks.” They would physically not answer the phones because they were afraid about what would happen if they had to sell these stocks, all the money that they would lose. That’s published in Forbes, it’s published in all these books about what happened in that time.
And the SEC actually came out with something in ’87 and then the next five, six, seven years there were more guidelines that came out that unleashed and let technology be more a part of the process. And one of the things was they actually made it to where you could reduce the fees that you charge to buy or sell a stock. So what happens there is now these stockbrokers who hung their hat on just having a license in the middle and they made money because they were in the middle, now their fees started to get compressed down. And then technology came in and the SEC and some other things allowed now automated trading to happen. You saw your Charles Schwabs popping, your E-Trades popping. That’s the phase when it popped in.
Mike: Yep.
Trevor: And what did you see happen with stockbrokers at that time? You saw them either go out of business because they weren’t able to adapt and they no longer could make money just for holding the license to be that cog in the middle or you saw them specialize. You saw them specialize in the registered investment advisors, financial planners and all these designations had start to come out over the years. And now so many people are able to buy and sell stocks even with automated AI-based platforms online were no physical stockbrokers anywhere in the process.
But this is how it relates to real estate. Okay? Those people that are willing and able to do that with an automated online thing in stocks are the people who are going to go in and do the research. They want to be able to feel like they’re in power. But there’s still so many people who just want to go and talk with a financial planner. They want to have someone who advises them through the process, a specialist.
So now where we are, and I’m going to relate it to retail and the wholesale side of the market. So you have investors over here on one side—sell your house fast, we’ll pay cash, get it done quickly, less hassle, don’t just show you house. Over here on the retail side you’ve got sell your house, we’re going to try to get the most money, but you have to be flexible with time. You have to be flexible with time. And you have to either rigmarole of a yard being in your sign and all the people going through your house and all that stuff. You’ve got these two factions over here.
And so what we’re seeing happen is that last five six years you’ve seen the technology platform start to catch up just like it did in the stock market. You’ve seen more and more people go, “You know what? I’m not going to reach out and use a real estate agent to look at houses. I’m just going to use Zillow or realtor.com.”
But still where we are, and I’m going to relate it to real estate investors, where we are you have a lot of people who would rather use technology to buy or sell a home but the structure of how to buy and sell home hasn’t caught up with that yet. There’s still people able to make money in the middle because they have the license just like on the other side.
Now, why does this relate to real estate investors? Because like Mike said, when a market is inefficient which is what we’re in right now in real estate, we’re in an inefficient market. If someone has to go through this structure just because it’s been there for 50 years to sell their house and that’s what they know is listing it on the MLS, that’s an inefficient market. That’s there just because it’s been there for 50 years, not because it’s the best.
And so we’re going to see over the next 10 years or so a lot more things made efficient. And everyone has seen Zillow pop in the scene. Probably three years ago they started putting web pages up online to buy houses, and then it would go away and then it would come back, then it would go away. And now they’re like, officially making announcements that they’re rounding up a bunch of money to buy houses. It’s a core part of their business strategy [this year 00:08:52].
Mike: Right, yep.
Trevor: And then you see Coldwell Banker and . . . And Keller Williams last year did iBuyer program pilots. That’s what they call . . . I think it was called iBuyer programs, dude, until I was reading like a Forbes article last year, I’m like, “Oh, that’s what the mainstream world calls directly buying a house. So that’s what they call iBuyers, I guess.” So they started iBuyer programs, and they piloted them in different markets where real estate agents would go to the seller and say, “Hey, here’s how I can list it and here’s the price I think we can get,” or, “Here’s an offer to sell your home quickly.” And so they piloted those in different markets and it looks like they’re going to roll them out sometime in the next couple of years. Then you have Offerpad and you have Opendoor and you have all the other ones like that.
And where I’m going with this is this, Mike. What we’re seeing is we’re seeing the market become more efficient like you said. We’re seeing now rather than the house seller have to go, “Well, I’ve got to go through the MLS and sell it,” or there’s this weird kind of not really well-known way of selling it to an investor, but everybody knows 10 agents, hardly anyone knows an investor like this mainstream people. And what I see the next 5 to 10 years is that converging is a lot more people knowing not just that I can sell my house by listing on the market, but a lot more people knowing and it being mainstream and acceptable by the mainstream America to sell a house directly because Offerpad, Opendoor, Zillow, all those are doing it.
And I’ll finish with this, is a lot of people are scared about that. Like, I don’t want you guys to be scared that this is happening. I think it’s amazing thing. It’s a good thing.
Mike: Yeah. Let’s talk about a . . . So the two ways . . . The big question here is like, okay, well, does that mean as an investor I’m screwed? Right? Or as an agent . . . Even agents I’ve seen a lot of pressure on the traditional agency model as well, broker and agent model, right? But let’s kind of break it into two pieces. And one you and I have talked about before about how to stand out by being yourself, adding value, building relationships, becoming a trustworthy face to your business. And then the second part of that is, how do you . . . So do you stand out by doing that? Right?
Well, I know you know Russell Brunson really well. Like, being that attractive character, what he calls, right? Is like, how do you be the person that somebody wants to work with? And then two is, how do you see things changing in terms of how you can get deals in terms of the value that you add to people as an investor, right? A lot of time historically, and we both know that the “I’ll close fast and pay cash” is tired, right? People have more needs than that. There’s like, “Well, can I lease it back for a while? Can you help with this? Can you help me move?” It might be other services that you offer or whatever.
But kind of break those two things down into how do you stand out and outperform people based on who you are as a person and how to build that trust, and then kind of your offers and the value that you add, what you have to do differently to compete better there?
Trevor: For sure, man. I’m going to write a note here. Stand out.
Mike: That was like a textbook . . . That was like a four-paragraph question.
Trevor: You’re good, dude. I’m going to roll it. This is good. I’m the most guilty one of asking a run-on questions. Those are good. That was only two. I love it.
Mike: Well, for now. For now. I’ll add more later.
Trevor: So the first thing I want to throw out, man, is like I said, is I’ve had people come to me that are scared about this. I was talking with a really good client of ours down in Arizona and he’s been doing really consistent deals 100% with search engine optimization, two, three, four deals a month and he makes really, really good money. I mean, he hit me up and said, “Hey Offerpad and Opendoor have heavily been investing in my market. They’re doing PPC.”
And you could tell it was kind of like a mini freak-out moment because he was starting to see some little things showing some of his number one rankings and some other stuff was eroding a little bit, like a little bit. And I had a call from like, man. So first of all, yeah, it is competition. So everyone can’t just look the other way and go, “Oh, it’s not competition.” It is competition, right? I mean, it’s another option for a house seller to go with. But at the end of the day, like I said, the biggest thing I want people to recognize is when you see these companies making direct selling, selling a house directly mainstream, it’s going to make it to where you have a less of a battle to sway them on the model, to sway them on the model of this as being credible.
And a lot of people have that struggle. That’s one of the first struggles you’ve got to have is you have to educate them on, “Well, I know what it means to sell a house retail through an agent, but what is this thing over here? So you’re going to have a less of a battle educating them on the model which is a good thing and it’s also going to open up the market to more people willing to sell directly.
So I don’t remember what the percentage is but it’s something crazy like 95% of homes are sold with the real estate agent. I think that number is going to start to go over. It’s going to start to go like 92%, 90%, 85%, 80%. And like you mentioned, real estate agents are seeing the writing on the wall too, that’s why you see the big brokerages, Keller Williams, Coldwell Banker, other ones are starting to do it too. They see the writing on the wall that things are going to converge in the middle towards one solution for sellers and the only thing is how fast you need it to happen, basically.
Mike: Sure.
Trevor: And then what they’re seeing is no longer can it be, “Hey, we’re going to be over here making money just because we have a license.” They’re seeing, it’s going to get eroded more and more towards direct selling. And a part of the market is going to get eaten up by technology. You’re going to see a part of the market just like with stocks that who people who are comfortable and they probably already sold a few houses, that people who were comfortable with the house selling-buying process, they’re probably going to use the Zillow app to sell their house and do it for way cheaper and that’s going to cut the agent out. That’s not really going to get the investor out.
Mike: Sure. Yeah.
Trevor: So the first thing is, how do you stand out? Right? Here’s a couple things I would do is, the first thing is we need to make a fundamental offer that’s attractive to people. Okay? And I’m going to answer your first question and second question kind of in one here. Is if people look at Offerpad, if people look at Opendoor and they say, “Oh my gosh, they’re coming in. I want to copy the look of their website. That must be what’s making it look good.” We’ve tested there are almost exact website designs and in most markets it converted to worse than what we’ve got at Carrot.
So we can develop websites that look just like that. We’ve done it. But in most markets it converted worse then you look at that and go, “Okay. So why is it that in our testing across hundreds and thousands of leads this design converted worse for many of them?” It’s because the offer was fundamentally different. Opendoor and Offerpad are coming in, they’re saying, “We’re not making an offer like investors are,” like you said, first cash, close quickly. That’s their offer. They’re not making an offer like agents are.
They’re making an offer in the middle going, “You know what? If you don’t have the time or you don’t want to wait to sell the house for a while but you want to sell the house quickly for a fair price and you’re willing to give up a little bit of money in exchange for that time, we’re going to help you out with that and we’re going to compare against working with an agent. We’re even going to list our pricing on our website just like you would go to buy something online.”
Mike: Right.
Trevor: And so what a lot of investors need to start doing is add transparency in your business model. And one of the reasons that direct house selling hasn’t become mainstream is because it’s not transparent. Anything that’s hard to understand is something that people go, “Okay. It’s hard to understand. I don’t get it. I’m going to move on and go over here to something I understand.”
Mike: Exactly.
Trevor: Which is a real estate agent, right? They understand it because everyone knows, “Well, I list it, I pay commission, it’s probably between 3% and 6%. I get it. Even if it’s going to cost me more time or money, I’m going to go that way because I get it.”
Mike: They understand it. Yeah.
Trevor: They understand it. So that’s one of the big things I would challenge real estate investors on is, how can you pull back and look at those in your market even if it’s Offerpad, Opendoor, Zillow, other real estate investors and go, “How can I make my model transparent? Do it on my website, do it when I’m talking with people in person, do it on the actual credibility package. Hey, here’s the way we look at properties. Here’s the way that we price properties. Here’s the way that we figure out what the fair market value is. And here’s the exact formula and the exact way that we actually decide how much money that we get to profit.
And if you can show them that and show it clearly, do it with video. Like, you could literally take a darn camera and you’re sitting here in your office evaluating a deal, I would like, literally tell people, “Hey, you’re evaluating a deal. Take out your camera and record a short video.” “Hey, this is Trevor with XYZ Homebuyers. Now I’m actually walking through and I’m going to make an offer on a house where someone inherited a house here in Dallas just this last summer and I’m going to be making an offer now. They’re in three different states . . . And you’re probably curious, how do homebuyers like us, credible homebuyers like us make offers? Well, I’m just going to walk you through how we’re doing it here. This house is worth X and here’s where we get that and here’s why I’m doing this and here’s why I’m doing this and here’s about how much money we would make. But in order to do that, here’s all the work we have to put into it. And this is one way.” And so the more people start to do that and get transparency in their model the better.
The next thing is. I’m not a big advocate for looking at competition on the daily basis because I feel that your customers . . . You got to understand your customer so well that you’re just going to solve their problem and almost ignore your competition most of the time because if you can solve their problem better than anyone else, your competition doesn’t matter. But looking at competition is really, really valuable when you’re trying to look at what are the different offerings and how do I make mine stand out?
Mike: Yep.
Trevor: And so in this case, I was talking with Tyler down there in Arizona and he was diving in and researching Offerpad, Opendoor and all these and he actually submitted . . . And I would suggest all of you guys do this. He actually submitted one of his properties through the thing to see what they would offer on it. And he goes, “Man, I was actually amazed because one of the websites was really hard to use, it was clunky to get through and submit stuff.” He was like, “That made me happy. The other website I had an amazing experience to submit through,” but he goes, “They both made terrible offers. I can beat these offers all day long.”
And so I go, “Sweet. Dude, do content on that. You’re retargeting ads. You should start to rank for phrases in your market around people researching Offerpad, Opendoor, Zillow, whatever those are or your biggest competitors as an investor. Like if Express Homebuyers is your biggest competitor in your market, sweet, I’d be doing content on your company versus Express Homebuyers. And if there’s real differences in there, like Express Homebuyers isn’t local, cool, play it up. Like, “Hey, this is Trevor with this company. And you’re probably curious, how does Express Homebuyers, this national company compare to ours? Well, they’re national. They’re over in Baltimore or DC. We’re local here. All of our team is here and here’s how that can make a difference for you.”
Mike: Right.
Trevor: So start to point those things out. And the more that you’re able to figure out, “Okay. What are the different things out there in my market and how can I be a little bit different than them?” That’s the first thing is adjust your offer, add transparency to it.
The next thing, Mike, is this, is just doing exactly what we’re doing right now and then doing exactly what I had mentioned, is so many people are afraid of video. You don’t have to do video, guys. You don’t have to. So I don’t want anyone to walk away from this thinking, “Man, I don’t want to do video, so therefore I’m going to struggle.” No. Not the case. But if you want to take the next step and stand out and win even more, video is going to help you do that. That’s just a choice you’ve got to make. Am I willing to do that or am I willing to have someone else do that in my market instead of me?
And what you do is you just start doing stuff like we’re doing. The reason you guys are in Mike’s FlipNerd community or Investor Fuel is because of the content he’s created. Mike went . . . Dude, you did . . . You’re episode 400 and something on the podcast. Your content is amazing. People trust you. They like you. The same thing with Carrot. And how can you as a real estate agent or investor . . . And I can give you some tactics later. How can you as a real estate agent or investors just put out little pieces of content consistently to add transparency that make people want to like you but then your offer needs to be a little bit different or better? Not your physical, “Hey,” not your price offer, but my offer. My offer could be a tweak in the way that I guarantee something. “If I make you an offer, I guarantee I will close.” That’s a difference in an offer because you have a lot of fly-by-night investors who make offers and back out all the time.
Mike: Absolutely.
Trevor: Well, I guarantee I’ll close if I make this offer. And put the guarantee all of your website, put the guarantee on your offers. This is a guaranteed offer. I will close on this price. If that’s an advantage you can do.
What are the other advantages you can put in there? With Carrot, the big advantage that we have is we said, “You know what? Our stuff performs better than everyone else’s. We’re going to show you so much data, so many results, so many case studies to prove it that when you send 100 visitors to a Carrot website and 100 visitors to our WordPress site or Wix or Weebly or any of our competitors, you’re going to get more leads and deals out of the Carrot site and we show it with proof. And so that’s one of the ways that we stand out with our offering.
Mike: Yeah. Yeah. And the interesting thing is as a homebuyer myself we bought hundreds of houses, been who knows? Talked to 10,000 sellers or whatever over the past 10 years, probably way more than that. It’s very clear. And anybody that’s actively buying house right now you’ll understand this too. When you walk into a house, it’s like if you’re married or dating or whatever, like, you just . . . Sometimes when you meet with somebody, you just click, right? You’re like, “I like that person.” It doesn’t mean I have to say I love them. But you find this relationship with people or you’re like, “I don’t resonate with that person at all.” Right? And people feel that way when you walk into their house to buy it too.
And arguably for some people, selling a house is probably the biggest decision they ever made in their life like a marriage or something, right? It’s a big deal and that first impression is important. And I think what you’ve taught and what I definitely agree with and I felt myself is, if you use video and people understand, “Who is going to walk in my door?” And if you’re a one-man or one-woman band, it might actually be you. If you have acquisitions people, it might be a representative of your team, but I think that’s still comes across . . . If it’s your team members, I think you would advocate too.
If you have acquisitions, people, you don’t have to be in all the videos. It could be members of your team. It could be this is my team collectively. We’re going to talk about how we help somebody through this situation. But I think some of the key things that I’ve talked to you about over the past couple years and learned about and I absolutely see this is create content around solutions that your sellers typically have. Death, divorce, inheritance, whatever the situation is. What do you . . . How did you solve somebody’s problem or how can you help them because they’ll resonate with that? And two is just be a friendly person that people want to work with, right?
Trevor: Yep. And dude, I’m looking at . . . so I’m in my office. I’ve got our core values posted on the wall. And it’s something that really early at Carrot we decided, “You know what? It’s really important to us.” Not really important, like, of the utmost importance that we run a business based off of a foundation of core values, ones we truly believe in. We re-evaluate them every year. And those core values bleed into everything that we do, everything that we do. It can be a piece of content, a Facebook Live that I did, a live chat support that you have with our team, a phone call you have with . . . Whatever it is. Even us sending out like all those thousands of Carrot dolls per year and stuff like that. And . . .
Mike: By the way, I was just taking some notes of something that I wanted to remember and I’m actually on my Carrot pad here.
Trevor: There we go. I like it.
Mike: Absolutely.
Trevor: At the bottom of it is one of our core values, “Be a beacon of positivity and possibility.” That’s at the bottom of that thing. So the reason I say this is, I know this sounds fluffy. A lot of people are wanting, “Hey, give me the Facebook ad, the tactic . . . Give me the thing that I can just plug in, it’s going to magically spit out all these deals. And it might get you deals, but the problem is if you want to build a solid foundation as technology starts to crunch in and take some more of the market space, as agents start to then come over to this side and start to actually buy properties and you see Offerpad and Opendoor, you’re going to see the market compress, and I think like I said, that can be a really amazing thing because if you . . . And this why I don’t want people to be scared. Thirty years ago, people were saying stockbrokers, they’re going to get obsolete . . . That business is bigger than ever, Mike. Like, big as ever.
Mike: Sure, yeah.
Trevor: They decided to shift and become specialists. They became specialists as all those designations—registered investment advisor, financial planner. All that they became specialists. And then the technology actually made stock buying more mainstream. So more people buy stocks today than they did 40 years ago.
Mike: Oh, no.
Trevor: The same thing is going to happen with real estate. The biggie is, the people who are trusted, the people who . . . If I was researching for a financial planner and I didn’t know someone locally that I had already built relationship with, I’d be doing a bunch of Google searches, and I guarantee if there was a bunch of them that looked all professional and they’ve got their little About page that was, “I went to college and got a BS in whatever it is. And I’ve been doing this for 35 years,” and there’s some pictures of like stock photos and stuff.
Then I saw another website that had a video of a guy that related to me or gal and said, “Hey, if this is where you’re looking to go in life and this is where you are and here’s what you need to go in between. I’ve got a few videos over here for you that might answer some of your questions and go over there and check out, the videos are free. If you have any questions, just hit me up here.” And like just add value. I’m like, “Man, that person seems awesome. I’m going to reach out to them.”
Mike: Yeah, no doubt.
Trevor: Interesting way.
Mike: And even it . . . And not only helps you close deals on the end, it helps eliminate some of your competition from ever getting in the house, right? Like, if they see . . . If you think of we have the selling process from, “I don’t know what the heck to do,” to, “Here’s who I’m going to sell to,” like if you kind of imagine the spectrum, your website and your content that you create and the value you put out there can carry a significant portion of that selling process burden that they have to learn. If they’ve already . . . they feel like, “Well, I’ve been watching you. I trust you.”
We have people that we sell coaching and we have a mastermind. Those people that join they feel like they’ve known me for years one way or another because of the podcast. And I don’t take that lightly, right? I mean, we still have to add a lot of value and we do our best to do that, but there’s some level of trust there that your content that you create for your website for buying houses can carry, let’s say, half of the burden of the sales process without you ever even talking to them, right?
Trevor: Huge, man. So I was on a call on Tuesday with a client of ours out of Oklahoma. I mentioned him before we hopped on here. His name is Carter. And he owns a company called 1-800-2 Sell Homes. It’s the biggest if not one of the top few in all of Oklahoma. For sure the biggest in Oklahoma City. And Carter moved over to Carrot a little over a year ago from a really nice pretty custom site. Like, they have got the budget. They’ve got the team. They had an amazing looking pretty custom site. And he was really skeptical about making a move over because it’s like a “template site,” right?
Mike: Yeah.
Trevor: So he came in, he came through our concierge program, we dialed it in and then I hit him up about a month later because I knew that they weren’t doing any online marketing. So this isn’t saying, “Hey, attach online marketing. That’s going to solve it all.” That can help you scale things up. If you stack on online marketing on top of the offline you’re doing, you’re going to scale up and add predictability and consistency and momentum.
But they were doing a bunch of radio, a bunch of TV, direct mail, all offline stuff, no online. And I hit him up later, I said, “Hey, how are things going?” And he sent me back an email. I’ll paraphrase it, basically, which that’s what you had just mentioned. He said, “Man, I never had guessed that . . . I never would have guessed that by making the switch on the website, it’d actually not just increased my leads . . . ”
He said his leads dramatically increased just from the traffic he was already getting to his website, like people googling his company name. People googling his company name, they saw the radio, they saw the TV, I’m going to go Google “1-800-2 Sell Homes” and they would land on his previous site. It looks pretty . . . It looks kind of good, but there’s no like real heart and depth to it and it wasn’t structured in a way to convert well. His new one converts great, operates on mobile amazingly.
But this is the thing that’s cool, man, is he said, “Not only did I see a massive uptick in leads as soon as it moved over there just because the current traffic is now converting better,” he said, “My lead to close ratio, my lead to close ratio dramatically increased.” And he said, “I never would have guessed that.” And so people might ask, “So yeah, I get it. If you have a website that converts, that is set up the structure better to convert higher, convert more of your traffic to leads, I get it that leads would increase. But why would your lead to close ratio increase?” Why would it increase from what he was before about 1 in 20? One in 20 leads returning to a deal before. Why was at that time it’s came back to normal . . . This came back to normal, a new normal now. It’s like 1 in 10 now for him, but during that two-month period it was one in four.
He said, “Twenty-five percent of our leads now are closing into a deal when before was like 1 in 20.” And you look at that and go, “Well, how?” It’s exactly what you had mentioned. People land on the website and they’ve got three or four options in their mind. I’ve got an agent over here, Billy Bob, and I’ve got a couple other investors who sent me postcards, and I did some Google searches and found these other ones, but you know with this company, they seem legit. I see testimonials. I see case studies. It’s clean clear . . . The website is clean and clear. It’s got simple branding on it. It’s got a good About page. I see Carter. I see this person. I see the real people. It’s got some videos that walk through their process.
Mike: Yeah, it’s awesome.
Trevor: And it just increases the lead to close ratio because they feel like they know you and have trust.
Mike: Yeah. And you know, when people search online, it’s very easy to do a search. Even if they have your name, like, you could click for your . . . search for your company name, but pages and pages of your competitors are going to show up because a lot of people use the search bar instead of the URL bar. They’ll like, just actually search for your name, right? So of course, they’re going to pull up your competitors.
And what we found is it’s super easy. That’s what we say. You know this. Like, we have our phone set up to where when somebody submits a web lead, like we get immediate text like, I want people to call just like, pretend like the phone is ringing and pick it up and call because you know what they’re doing right now unless you do that, they’re filling out more forms or they’re researching other competitors, so it’s like you have to stop that process. And one other way to stop that process is to just look like you give a damn and have content that helps answer their questions so they stop filling out forms, right?
Trevor: And put . . . Like, one thing that I’ve coached some people on as well is even after that opt-in process, right? So after the opt-in . . . Here’s a couple of things that people can do to increase their lead to close ratio. Online and offline marketing. So I’ll give you a couple tips whether you guys are an offline or online. So one of them online is as soon as the lead comes in, of course, you get them out an email immediately. Our system does that automatically that gets them to reply. You want that email to make them reply. You don’t want the email to sell them, you don’t want the email to say, “Hey, congrats, thanks for submitting.” You want them to reply to the email to start a dialogue immediately.
So how do you get them to reply? The email that we have go out in our system, it’s really personal, it looks like he just sat there on an iPhone and typed it. And it’s like, “Hey name or whatever it is, my system just forwarded me this email.” It’s got their lead information below it and on property, then we insert their property address in the email automatically, on this property address . . . “Are you looking to sell . . . ” What is it? It said, “I’ve got time later today to discuss it. What time works best for you to give me a call?” Like, I just want them to reply. And we’ve tested a few different things. “Is this address correct?” Things like that. I don’t care what their answer is. I just want them to reply to engage them. And once they . . .
Mike: Just engaging them. Yeah.
Trevor: Yep. The next thing is put a video at the top of your page two, your step two. So they submit their information. It can be a really short video after they submit step one or put it after step two after you get more information on step two. It just says, “Hey, congrats. We really appreciate you submitting this. We’re actually going to be looking at your . . . ” Like, walk them through a three-minute video of what’s going to happen next because then it starts to make them comfortable.
And you can replicate the same darn thing offline. I’ve told this story before. I think it’s at the very first Investor Fuel event that I went to where I talked about this foundation repair company that right after we moved into our house on the river there’s this massive rain and like half of the darn hillside fell into the river right below our deck. And of course, it freaked me out because our deck pilings are there and it just doesn’t look good. And so I’m like going, “Okay. Who’s going to fix this?” and the only people I could think of are like dirt movers or foundation people or whatever.
So I Google search some stuff, found some foundation repair companies, same thing your sellers and buyers are doing, guys. And I found a few. And one of them is a regional company but they are based here in Roseburg. They’re a huge company. And there were three other ones that were based in Roseburg also. And so I looked at all the website but it looks like they all technically did the work and that’s what your sellers are thinking about. Do they . . . Can they actually have something that can solve my problem? Yeah, they do the work. They move dirt and help foundation and stuff. And then the next thing is like, “Okay. So are they legit? Are they company that I want to work with?” And I’m sure the other companies were legit. They just hadn’t put in the time to actually build a credible source online for them.
Mike: Sure, yeah.
Trevor: This other company called TerraFirma, they’ve got it down, man. Their website had testimonials everywhere, it had stuff showing their process, showing before and afters, on had a really clear section in their About page, awards they’ve won, badges at the bottom. You know what? The badges were at the bottom of the website but they looked official or something.
Mike: Look cred . . . Yeah, it gave credibility.
Trevor: Yeah, it gave credibility. And so I submitted their form. Immediately I get a call back and an email from them. The girl was really nice. She then took my information and she said, “Okay. We can set up an appointment.” It was three or four days out. And she said, “Okay, cool. It’s going to be . . . ” I can’t remember the guy’s name, but, “Brian on our team is going to be showing up at 2:00. Keep an eye on your email box. You’re going to get an email from Brian today.”
And I looked and it was all automated. It wasn’t manual. But an email came from Brian at TerraFirma and had a picture of him at the bottom of the thing and, “Hey Trevor, we’re going to be out there at insert our date.” And he said, “Here’s kind of the process attached as a PDF that walks through our process. If you have any questions hit reply and let me know.” I’m like, “Whoa, I know it’s automated because I’m a marketer.” No one else . . . If you’re not in marketing, you wouldn’t.
He shows up on time. But the next day or two days later I got a bi-fold, tri-fold or whatever it’s called thing in the mail from them which is their credibility packet. I opened it up, “Hey, here’s TerraFirma and here’s some cool awards they’ve got, case studies, testimonials, a note from the founder.” And then I basically went through their process page by page. “The first thing we do is this. The second thing we do is this.” And it shows pictures. “The third thing we do is this.” And then the last was like all these before and afters. “And here’s references of people you can call.” Like, there’s no way I’m going to go with any other company.
Mike: Yeah.
Trevor: Even if they’re way cheaper, I’m not going to go with the other guys.
Mike: Absolutely.
Trevor: No way. You guys can do the same thing. You can do that same thing with your offline or online.
Mike: Yeah, I’d encourage people to do that. Like you said, marketers do this more. Some of you that if you’re newer to real estate investing and you don’t really think of yourself as a marketer yet, like, you need to become one, right? You should try to reverse-engineer. Like direct mail, I look at . . . We get a lot of junk but there’s certain companies like Capital One, like, they’re always on the cutting edge of direct mail. Like, their handwriting technology, their handwriting fonts, how they get me to open it without knowing what it is. Like all these things. I’m like a student of this, right? You just need to become . . . All of us are consumers. We’re all buying stuff. And I just encourage you guys to go through a process.
Like think of every business this way—lead generation, there’s some sales and marketing and there’s fulfillment. Like, that’s our business is the same way, right? Just think of those stages. Everywhere you go to shop now or you buy online, like, I’m in the lead generation stage and just reverse-engineer good experiences and say, “How can I apply that to my business?” because every business works that way.
Trevor: And there’s things too I want to give. So those of you who are newer, you probably heard all that stuff that I said. You can do everything that I just said with the online stuff. We can help you. You can try to go it alone. Either way. But you can put up videos to talk about how you can help people even if you haven’t done 20 deals. Just come from the heart. “Hey, here’s who I am. Here’s why I love real estate. I’ve been a teacher for 20 years and I’ve lived in this town for 25 years. And I’ve sold my home several times and I helped my grandmother go through this situation and we’re here to help serve you for these reasons and here’s our core values.”
Like, you can start that way and get your first deal and then you get a testimonial and then get some more. So you can start that way. But what I would do is if you don’t have all the automation systems setup, do what I do. Like even now with Carrot where we’ve got a big company, big budget, things like that, I’m always just getting . . . Man, I’m just getting, like, guerrilla with stuff. I physically text so many customers every single week that I see some things pop up on our system, and we could automate this stuff, but I see something pop up, I want to reach out to that person for whatever reason. It could be a person who is showing that they’re slipping because they’re not executing things. I can see that they are a pro-investor, I’m like, “All right. Phone number.” I take it out and texting them at that moment and they’re going, “Whoa, a text message from the CEO of the company. That’s crazy.”
So what could you do right now that’s not getting in your head thinking? “Man, I don’t have a CRM. I don’t have this.” You don’t have to have those. A client of ours, Jeff Filali, I see him posting on Facebook all the time. He has an amazing business. He does multiple six-figures a year and I didn’t realize until last week that he didn’t have a CRM. He’s just using Carrot’s Lead Manager. And so you see people getting caught up on all these systems. “Man, I’ve got to have this amazing CRM first.” Yeah, do that if you have so many leads that you can’t handle. If you have so many leads that you can’t manage, get a CRM, otherwise do what Jeff is doing and use Carrot’s Lead Manager.
Do what Brian Rockwell, another client of ours is doing . . . His first year he did $600,000 in Dallas 100% online all with a whiteboard. Dude, he didn’t . . . Literally, a whiteboard with all his deals. And so is that ideal? No. Did he have profits slip through his fingers? He definitely did because he didn’t have follow-up in place and all that stuff, but he did $600,000 his first year because he executed and got great at one thing and then year two he’s like, “Okay, now I think I need to get a CRM in place,” and he did.
So give yourselves a pass there, guys. Get the important stuff done first. Number one, you’ve got to get leads coming in. You’ve got to get leads coming in. Number two, you’ve got to learn how to negotiate those leads and make good offers and make a good offer that stands out and during that process build credibility. Number three, you got to learn how to follow up. And there’s probably something else I’m missing there too, but do it in that order. I think so many people try to get the follow-up stuff in place first freaked out about getting leads because I got to get all the stuff perfect. Like, “No, just get out there and get leads and then get your follow-up stuff in place once you actually have a pain.”
Mike: Yeah, absolutely. Absolutely, yeah. I talk about all the time, a lot of real estate investors focus on building a Ferrari to haul manure. They’re just like, put the cart before the horse and it’s like, hey, if you don’t have leads, you don’t have a business. So it doesn’t matter how cool your backend systems are if you don’t have anything to put in it.
Trevor: And then they don’t call their leads. Like you were saying before they get leads and that was another thing that Tyler had mentioned about Offerpad and Opendoor in his research. And he’s researching them and he submits to both sites. He’s like, “Offerpad didn’t give me a call for nine days after I submitted.”
Mike: Oh, wow.
Trevor: He said, “Opendoor gave me a call immediately but Offerpad was nine days.” Like, I’ll beat them all day long.
Mike: Yeah, no doubt. No doubt. It’ll be sold before they reach out . . . before they talked to them.
Trevor: Yeah, exactly.
Mike: Awesome. Hey everybody, if you’re listening right now and you’ve gotten a lot of value out of this, I’d love for you to subscribe to the show. We’ve been doing this for over five years now. We actually have a few different podcasts, the shows we’ve done over time. We have actually over 1,500 different podcasts that we’ve created over the past five years.
Trevor: That’s crazy, man.
Mike: This is really our flagship sale. I love having people like Trevor on. And the reason I love doing this is I love talking to people like Trevor who’s also in my Investor Fuel mastermind, one of our founding members, actually. Another reason is because I love to add value back to people and just a little bit of labor of love and . . . Labor love? Labor of love? Is that what they say, Trevor? I don’t know.
Trevor: I knew what you said.
Mike: Getting tongue tied there. But what gives me the most . . . But what kind of helps me understand whether we’re adding value here is subscribers and positive reviews and just being willing to share what we do here on social media. So if you could share it on social media, give us a review and subscribe, we’d love it. Trevor, thanks so much for joining us on the show today.
Trevor: Mike . . . Man, I’m always honored to come on here and . . . And like we were saying before we hopped on, dude, it’s just been really, really cool seeing not just what you built with FlipNerd, but especially with Investor Fuel. And I’ve been to those events, everyone. If you’re not in some sort of a mastermind, I don’t care if you don’t have the budget, form a local mastermind with people locally until you can afford the budget. But if you’re an experienced investor and you think you’re going to fly through this stuff alone and you think you’re just smart enough that you can like I used to think before I started actually joining masterminds, and then I would actually get . . . . I would try to grow the company on my own. “Oh my gosh, I can’t do this stuff. I don’t know it.” You get around masterminds with the right people, they just know the answer. It’s just like the easy button in some cases for getting to where you want to go. So Investor Fuel is amazing. You all reach out to Mike if you qualify for that. If not, make a local one to get started.
Mike: Yep. Awesome. Awesome. Trevor, if folks want to get ahold of you, they want to learn more about the great work you’re doing, where do they go?
Trevor: Yep, carrot.com. It’s like the vegetable, just carrot.com. And they can . . . All kinds of free information over there are blog, my podcast, the CarrotCast. Yeah, just carrot.com will give you a good start.
Mike: Awesome. We’ll add some links down below here. So Trevor, thanks again for your time today. I appreciate you.
Trevor: Mike, thanks, buddy. We’ll see you.
Mike: Everybody, I appreciate you guys. Until the next episode, stay strong, stay cool, and keep on fighting for freedom. We’ll see you.
Thanks for listening to today’s show. There are three ways I can help you start or grow your real estate investing business. If you’re a new investor and just getting started, the FlipNerd Investor Coaching program is the most effective program in America. I’ve been coaching and mentoring new real estate investors for 10 years and my students have literally purchased thousands and thousands of properties. Many of them started with little to no experience at all. Our program is a paint-by-numbers program where we tell you exactly what to do week by week to make sure that you don’t get distracted on your way to results. We show you how to build a real business not just create another job for yourself. New memberships are limited. You can learn more and apply or schedule a call with me and my team at flipnerd.com/coaching.
If you’re an experienced investor doing a minimum of 10 deals a year, up to 500 deals a year or more, or have a multimillion-dollar real estate portfolio already, you should check out our powerful Investor Fuel Real Estate Investor Mastermind. Over 100 of the nation’s leading real estate investors are members and it’s not uncommon for our members to 2 to 5X their business just from getting around other members at Investor Fuel. At Investor Fuel each of us are business advisors to one another’s businesses, but we don’t stop at business. We focus heavily on becoming better people and living fuller lives. If you’re looking for fuel for your business or fuel for your life, please check out investorfuel.com. Applications and interviews are required as most investors are not a fit for our community. Please learn more at investorfuel.com.
If you’re not ready for coaching or masterminds but eager to start learning more about investing, please join our private Facebook group by visiting flipnerd.com/facebook. New members get access to free training from us right here at flipnerd.com, and it’s a community to safely ask your questions. It’s a great place to get started. Simply go to flipnerd.com/facebook to request your access today.