BiggerPockets Real Estate Podcast - 81: Generating Real Estate Leads Through Direct Mail with Michael Quarles

Episode Date: July 31, 2014

Today on the BiggerPockets Podcast we are excited to welcome back Michael Quarles to the show. Several weeks ago we talked with Michael about his story and spent most of the show discussing the topic of negotiation, never getting to one of the most important topics we wanted to discuss with Michael: marketing. Specifically, Michael is a wealth of knowledge on all things involving direct mail, so today we’re going to tap into that knowledge. Today, Michael is going to teach you everything you need to know to get started in successful direct mail marketing and attract leads that no one else can get. We cover everything from market research to creating a call-capture system and everything in between. This show will go down in the history of BiggerPockets as one of the most actionable shows to date! In This Show, We Cover: The ins and outs of whole-tailing Everything you ever wanted to know about direct mail The beauty of controlling who calls you through direct mail How to start marketing even if you only have $500 What to do in the face of rejection How much does a starter marketing budget cost? How BiggerPockets is like a beautiful woman How to do your market research  Softwares that tell you what houses in your market have equity What filters to set in terms of lead generation Probate vs. absentee owners How to generate leads from bandit signs without EVER using them The 5 different types of direct mail The importance of using multiple types of mail Hand-written font vs. actual writing  The biggest mistake people make in direct mail How many times should you repeat a mail sequence? The importance of setting up your call capture system How to memorize scripts and much, much more! Links Mentioned BP Podcast 077: Negotiating Your Way to 1000 Wholetail Real Estate Deals with Michael Quarles How to Write the Perfect Elevator Pitch in Under 10 Minutes! Tweetable Topics “I’m not a passive income earner, I’m a massive income earner.” (Tweet This!) “People don’t buy what you sell, they buy who you are.” (Tweet This!) Connect with Michael Michael’s BiggerPockets Profile Michael’s Website: http://www.yellowletters.com/ Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast, show 81. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everybody? This is Josh Dorkin. Host.

To the Bigger Pockets podcast here with my co-host. The Man, The Myth. It's Brandon Turner. Hey, what's up? What's up, Brandon? How are you? I'm good. Hey, I got a serious question for you.

Very serious. Yeah, what's up? Yeah. What is your favorite movie? My favorite movie. Ooh, that's a tough one. Because it's fresh in my mind. I'm going to say Shawshank Redemption.

Oh, okay. That's a good movie. But, uh, yeah, that's one of them. How about you? That thing you do, Tom Hanks movie. Oh, stop. I love that movie. Is that really your favorite movie?

That is my all-time favorite movie. I learned to play drones because of that. That actually says a lot about you. Okay. It's all starting to make sense now, man. It's all starting to make sense. I was destined to be a rock star. I had faith in you, and it just keeps dropping.

Awesome, man. Well, that is a good question. I'm glad you asked it. Thanks. People want to know, so that's why, you know. Yeah. All right. Enough about us. Let's get on to the interview. Yeah, let's do it. All right, guys. So today we have a real, really great show.

Today, we actually have a follow-up from our show 77. Today's show is with Michael Quarles. And we wanted to have them back because we didn't quite have enough time to delve into all the topics that we wanted to delve into last time. And those topics are on the subject of marketing. And we'll get into that in a second. But before we do, let's get into today's. Quick tip. All right, today's quick tip is Bigger Pockets Fileplace. If you are not aware, we have a place on the site called the BiggerPockets Fileplace. You go to BiggerPockets.com slash files, F-I-L-E-S. And there you can find all sorts of files. You can find spreadsheet and forms and agreements. And ultimately, it's your peers sharing documents that they've put together to help them with their business and they're they're putting it out there to

share with you so definitely check it out you get lots of ideas definitely do not just go and use a contract if somebody put a contract up there we would absolutely recommend you you run anything by your attorney before you ever use it so uh now just be careful on that stuff but definitely uh be sure to take a look and see what's out there there's there's a lot of great things cool all right And yeah, by the way, if you're a regular free BiggerPockets member, you can download three a week. If you're a plus, you can download five a week. And if you're a pro member, you can download as many as you want. And that is our pro benefit of the week.

So check it out. Upgrade to Pro BiggerPockets.com slash pro, and you can get download unlimited files every single week. So with that, let's bring in Michael. You want to introduce them? Yeah. So really quick, Michael is an active investor out of California. He specializes in wholesaling. He's done a ton of these wholesale deals.

It's kind of a cool strategy. Again, we talked about it back in show 77, so definitely check that out. He's also the owner of Yellow Letters.com. It's this monster direct mail company, and he's definitely one of the brighter minds out there on the topic of marketing in direct mail, which is why we really wanted to have him back because the last show we talked about negotiation and not direct mail. So here we are. We're back. We're on show 81, and we're going to talk to you guys about direct mail. and marketing, and there's a ton of really, really great information in this one.

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Just sign in through your pro account to get started. Rent Ready helps ensure on-time rent with auto reminders, keeps communication professional, and lets you post listings to multiple sites. Check it out at rentready.com slash bigger pockets. That's rent-r-re-D-I-com slash bigger pockets. So with that, let's bring them in. All right, Michael, welcome back to the show. It's great to have you again.

It is absolutely great to be here. If this is half as fun as the last one, I'm just going to go home after this. And relax. Yeah, the last show was a lot of fun. People really like that. Definitely one of our most popular shows we've done. And because of that, that is why you're back so soon. I mean, usually we wait a year between people.

But last time we had like this list of what, like 50 questions that I wanted to ask you. Like I kind of wrote up this list and, yeah, got to the end of our interview and we had done like six questions. And so we definitely want to explore more of those topics today, especially on the topic of marketing. And that's why we're bringing you back so soon. We're about a month out and we've had well over 30,000 folks listen to your show, which is... Is that good or bad? That's good. That's 30,000 listeners is slightly, slightly above our average. But it's, yeah, popular show.

Yeah. So why don't we just, why don't we start with a recap? Because not everyone would have listened to the last show. So those people who haven't... And that was, by the way, that was show 77 of the Bigger Pockets podcast. And you could find that at biggerpockets.com slash show 77. Yeah. So definitely listen to that after you're done with this one if you haven't listened to that one yet.

But those people who haven't heard that, once you give us like a two-minute recap of like, what do you, how did you get started and what kind of investing do you do? I got started in real estate. Gosh, that's a long story for two minutes. You know, buying that piece of dirt and writing that bad check and doing what I didn't know, I couldn't do, which is why I could do it because I didn't know I couldn't do it. What are you talking about, man? What's the recap of the last show?

That's the most cryptic thing I've ever heard in my life. Now it's going to make everyone want to go listen to that show. Yeah, it's true. So, yeah, it was absolutely not the way to start. And I think we spoke about that for, what, an hour and a half. But at the same time, it's allowed me to invest in houses and I flip houses. I don't rehab them. So I think, Josh, you coined the word on that show, hoteling.

So I guess that would fit probably my marketing and my investment strategy of what I do with these properties. I'm not a passive income earner. I'm a massive income earner. That's a tweetable topic right there. That's funny. Well, my ADD gets in the way for passive income. So I enjoy buying houses and selling them for the as is value without doing anything with them. And I buy them at 60 to 50% off value and turn around and,

and sell them at 100% of the value that they're at. That's cool. Gotcha. That's cool. Well, cool. Yeah, so, yeah, we talked about that a lot last time, which is a fascinating model. And, but the whole idea behind, I mean, whole tailing, as they call it, the idea predicates, you have to have a good deal.

I mean, like, you have to because, I mean, you know what I mean? Like, if you're going to go out and fix up a house, you can force, you can buy a halfway decent deal and put your own labor into it and fix it up and make a little bit of money off and flipping. But if you're going to sell it without fixing it. That's a lot more tough. I don't see it as more tough, actually. I don't have to learn how to paint, and I don't have to learn how to put carpet in or tile in or where stuff is at Home Depot.

I don't have to be there at 6.30 every morning. And I don't have to worry about if I have figured out my cost correctly because I'm not doing any of those items. And I don't know if you two have ever spent hours upon hours in Home Depot looking for a bolt or a screw or a paintbrush type or what have you. Josh, that is outstanding cool. I was just trying to go there. He just put his sunglasses on his raybans. Wow. He did look like vanilla ice there for a second.

I've got this horrible glare outside my window, and I'm trying to decide if that's the way to do it. It's either Ray Charles or vanilla ice ice ice. Home Depot, yes. I've spent many, many an hour looking for. Yeah, that's no fun. It's no fun. So when I look at the opportunity to have an opportunity,

and always look at it, how do you get there? I mean, the phone doesn't ring by accident. It's not like they're wrong phone calls. You know, someone doesn't ring trying to call their aunt, and then all of a sudden they get you by mistake and have a house to sell. So we deal all these things on purpose when we have that in goal in mind. And the prospect for a wholesale deal or a flip deal or a rehab deal or a hotel deal, they look the same.

They all have to have an equity base. Yeah. Yeah. So let's get to that, right? they all have to have an equity base. So in order to get an equity base, we've got to find a deal that's a, quote, distressed deal. And, you know, as you were saying, we've got to get the phone to ring. So how on earth do we get the phone to ring? And that's really the subject that we wanted to cover today with you. So I know that you're probably one of the folks that people on

bigger pockets and probably elsewhere look up to as one of the, you know, one of the better marketers out there. So let's get into the topic of marketing. And I guess we'll start with kind of your bread and butter, at least what I believe to be your bread and butter, which is direct mail. So what is direct mail? Let's just start with that. In today's marketplace, I think direct mail is probably the number one marketing item that you can use. So we're taking something, a piece of paper, we're writing something on that piece of paper. We're putting a stamp on it, an address on it, and sending it through the U.S. Postal Service to someone. And we're going to. hoping that someone has a desire to sell their house. We don't know if they are. I mean,

if we only, if we had a list of the motivated sellers, we'd send out like two pieces of mail because we wouldn't need to buy any more houses than that. So we send them out mail and then they call us back. And inside of sending out that mail, there are various types of mail and messages that create a response that we want to have created. In my market, I only want to talk to people that can actually sell me a house. So if I send a letter out to someone who's maybe upside down or has marginal equity or just bought the house even though it's free and clear. I'm, you know, it doesn't make any sense to have them to call me, which is why I don't like, you know, the Bandit Sign concept, because that's mass of marketing or mass marketing and you

can't control who's calling you, where I can control who calls me with my direct mail, which is the beauty of direct mail where if we looked at 07, 06, in that time period where a lot of sellers could call us and most everybody had equity, an equity base. We didn't have to use as much direct mail. we could use some of the other things out there to get callers. You know, the year that I did 200 deals, I think I spent, well, I know I spent 600 grand marketing that year. Whoa. Well, it's all relative.

It is, I guess. It's just amazing to think that. So we knew that we were going to make $52,000 per deal. That was our goal. Or 25% whichever is greater. So $204,000, it turned from $52,000 to more. Anything under $204,000, it turned from the 25% to the 52. So, you know, you take 200 times 52,000.

What is that? In your market, yeah, in your marketing should, you know, it should start out somewhere between 8 to 12 percent, depending on what you're wanting to achieve and what your goals are. It could get up to 20 to 22 percent. Hey, Michael, really quick. So you're talking 8 to 10 or up to 22 percent of what? Well, of your spend.

So if I spend a dollar, I should get $8 or $12 back. Got it. And eventually I know I'm going to get $20 to $22 back. So you're saying for every dollar spent, specifically on marketing? On marketing, right. On marketing. And marketing, you know, it looks like a lot of different things. Right.

I mean, most people don't realize we are marketing. And we are media here. And a lot of people don't use themselves as a marketing tool, but it's one of the best marketing tools that are out there. I mean, if someone asked me today, I have $500 and I want to get started in real estate investing, what do I do? Do I send out a postcard? Do I send out a yellow letter?

Do I send out a zip letter? Do I get a ban at sign? What do I do? And my goal for them would be, over the next 30 days, write down everybody that you know who lives in your market that can influence that market. So they have a house or they know someone that has house. Write down their name, their phone number. If you have their email address or their physical address, great. When you get that list done, divide that list by 22 because we only want to work during normal work hours.

A lot of investors think they have to work all the time and they don't. This is a business just like any other business. and we have 22 days a week. I'm sorry, 22 days a month you should work. Take that list, divide it by 22. So now you have, if you have 220 people on your list, you have 10 people a day that know you can actually say hello to you, that you can call on the phone and say,

Josh, hi, this is Michael. Just want you to know. After a long and careful consideration, I've decided to be a real estate investor. And I knew that you would want to help me out. And so I wanted to let you know and send you a business card of mine. And, you know, I buy houses from this person and that person and those kinds of people.

So if you come across to anybody that you know that needs to have my service, can you give them my information? And if someone were to do that, and that's free, all you have to do is buy a thousand business cards or more. They would never need another marketing piece. They wouldn't need yellow letters. They wouldn't need ban it signs. They wouldn't need TV, radio, newspaper, anything else.

The problem with that is what I call that sweat marketing and network marketing. And when people do that, they also can't go on vacation because their business goes with them. But in the beginning, if you only have $500, I think everybody should start doing that. But, you know, they're embarrassed as well. They can't tell mom and dad that they're going to do something else or wife that they can do something. They're going to do something else or their boss that they want to take on this other adventure or venture because maybe they sold Amway or life insurance or Tupperware or whatever it was. And they failed at that. So they've kind of cried wolf.

Well, get over. Everybody has failures. I mean, let's say all of us raise our hand on failure. Yep. So, I mean, if you have failure, that means you just have to get back up again, you know, falling down just right before you get back up. Yeah. Yeah. No, I agree.

I think that's a great technique. And I know when I was a real estate agent, I followed something similar. I literally put together a list of everybody I know and just started calling, you know, started working the phones. And it was a great way to get clients. I think a lot of people, again, end up in that fear mindset or embarrassment or something else where they just say, hey, well, you know, I don't. know, you know, maybe they're going to reject me. Well, you're going to get rejected a lot in real estate, so you better start learning. And rejections are actually not necessarily rejections. They're a step towards doing a deal. So isn't it just like another step in the process of

getting a contract signed? So I don't look at it as rejection as a negative thing. Say no to me. That is great because you say no to me. That's one step closer to a yes. And by the way, I learned this lesson the hard way for anybody on the phone. Just because we preach it doesn't mean we always use it, which is the hardest thing when you try to help someone. It reminds us to do it ourselves. And so my gardener, who was mowing the lawn on one of my houses, his real estate agent called me because I had a for sale sign on that lawn. And the real estate agent, now this guy's my gardener, called me and wanted to write an offer on my house for my gardener. And I paid my gardener's real estate agent $4,500 to sell my gardener my house because I didn't tell my gardener all they had to do was come to me directly.

And shame on me, but we think about that. How many times does that happen? How many times do we have a conversation with someone who says, yeah, I know a guy. They sold a house last month to a real estate investor. Well, why didn't I talk to you last month? What was it about me that stopped me from doing that? That's just all about marketing. Yeah.

So I'm curious. I mean, I think that's a really good point. I don't want to just move on. But I do have something like you said earlier. And I love the Gardner story. I think that's fantastic. And it's true. You know,

I think we have to remember to talk to everybody. Talk to everybody because you don't know who's investing and you don't know who that next sale is going to go to and the next deal is going to be with. So I love that. Well, and I can definitely identify with what you were saying about the, you know, maybe you sold Amway in the past or maybe you I mean, I never sold Amway. But, you know, like the idea of I'm a, I'm a dreamer. Is that the right word? Like an entrepreneur, maybe whatever.

I like business ideas. So when I told my parents back when I was 21 that I was going to be a real estate investor, like they thought I was, you know, crazy or just, you know, grabbed a random get rich quick scheme book or late night TV thing. And, you know, I mean like it was almost embarrassing, right? Like they just thought, oh, it's just branded another one of his goofy ideas. So I can definitely identify with that quite a bit. You know, and everybody has those. And I always tell people when those, those, those, those, those, those, those maysayers or those people that you're afraid to tell, those are perfect people to tell. Because if I can get, if I can talk to my parents and tell them I want to do something, then they, they're going to, and want to laugh at me kind of thing. Or if I'm embarrassed to because I think they'll laugh at me. But if I can talk to them, tell them and handle all of their objections, first, they love me, so they're never going to get mad at me. Secondly, but when I handle their objection,

that tells me I'm one step closer to being able to handle the seller's objection. And so we need a bunch of those people. You have to role play a lot. When you market, when you send out anything, you put up a banat sign or send out a yellow letter or a postcard or whatever you do, if you're not ready to receive the prospects call or opportunity, don't do it. I mean, so you're standing in the grocery line and you're wearing an I buy houses t-shirt or shirt, and the guy or the gal in front of you are behind you, say, hey, so you buy houses? if you don't know what to say when they ask you that,

and if it's not a canned response, and it can't be canned like you're reading it on the, like a back of a food item, you have to say, my name is Michael Quarles. I buy houses. I buy from these people, these people, these people,

these people. I do all of these things for them. And if you don't close with those things and tell them the story, shame on you for marketing. Shame on you for wearing that shirt, because that's why we're doing it. You know, it's funny.

I wrote a post about that exact thing the other day on the bigger pockets of blog. It was called How to Write the Perfect Elevator Pitch in under 10 minutes. And whether or not my strategy for writing a pitch is exactly what everyone should do, I mean, people come up with their own ways. But my point with the article was this was that for like five years, that exactly was what happened to me. I mean, people would say, so what do you do? And I mean, this is what I would say. I'd be like, uh, I invest in real estate.

What do you do? I mean, that was my thing, right? That was my pitch. That was how like I explained what I did in life. And like now when I look back, I'm like, man, I was so stupid. only took me 10 minutes to sit down one time, come up with a list or come up with kind of a canned, sort of canned response, but again, not like, you know, I'm reading it, but come up with just an answer to that question that would help me out in my business and maybe help me raise money,

help me find deals, whatever. So again, I'll put a link to that in the show notes at biggerpockets.com slash show 81. And, but yeah, definitely check that out if you want to know how to do your pitch. But to go back to something you said earlier, too, you said somebody will come to you and say, I got $500, I want to get started with real estate investing. How do I get started? And you said, you know, make the list, which is awesome. So let me kind of rephrase that question. How much money do I need to get started with direct mail? We'll go back to the direct mail topic. How much do I need to get started? Will $500 do it? Will $500 a month do it? What do I need? Before you can, where I can answer that, I have to know what someone's objective is.

So if their objective is, I'm going to buy and hold, and I'm going to buy it 100% value. and I'm going to finance all my purchases, and I'm not looking to buy equity when I purchase, then that takes a limited amount of money. Literally, you can finance your marketing within buying the house because they allow I look at MLS and what realtors get paid. Some of what they get paid is for marketing. And so you can basically finance your marketing dollars. So in that case, you don't need much at all.

Yeah. Right? Yep. But if you're going to do shorts or if you're going to do shorts or if you're going to do lease options or maybe marginal sub 2s where you're not putting a lot of money out until you have to perform on the short situation that takes less as well and I always looked at it as it said told people what do you want to make how do you want to make it so I want to make 5,000 dollars per deal whole selling okay so how many of those do you want to do well I want to do

17 of them okay well can you do 17 of those in what period of time well I want to do that monthly. Okay, so you want to make $85,000 monthly doing 17 wholesale deals that you're going to make $5,000 on. They say yes. I said, okay, it's a, keep in mind, it's a one-tenth multiplier. So if you're $85,000, multiply it by 10%, that's what you're going to have to spend. No, but what if I want to make $100,000 in equity that I can flip? Fantastic. You have to spend $10,000 in marketing to earn in that hundred thousand. And that is the truest number there is. Irrespective of if you're a marginal person, a flipper, or a wholesaler, or a wholesaler, you're going to spend 10% of your whatever you want to make in marketing. If you don't, you could get lucky. There's, you know,

a ton of people out there that, you know, they'll send out 300 postcards and they'll get a deal. But do you want to have a business that you can get lucky with? And it's only sustained by how much luck you have? Or do you want a business that you can say, it's going to come in here every month. It's going to be a membership business. Every month, someone's going to give me a membership due. We just call them houses of memberships. But every month, that's the business I want. And so if I know I have to have an on-purpose, predictable business, then I know I have to spend marketing dollars. And I know the marketing dollar that I spend today won't entirely benefit me today. It will come back to me in a year from today.

Yeah. So, and then what most people don't realize is, remember earlier we were talking about, well, how do you start and, you know, you build that list of your center of influence is what it's called? Well, in fact, if you read on Bigger Pockets, which is an outstanding website. Thank you. Well, it is. And I don't know if the two of you have ever visited anybody else, any of the other arenas

that are out there. But, you know, I do every once in a while just to become so happy that I'm on bigger pockets. like, you know, you look at, and I'm going to take this personally, I'm going like, I see my fiancee and she's a beautiful female. But then when I go see, but when I go look at a like, not so beautiful female, I'm really happy with my family. So what you're trying to say is bigger pockets is a beautiful female. Clearly. Yeah. Well, it clearly. As it compares to the other places that you both now are out there. But anyway. Gotcha. Well, so I wanted to, sorry to catch you off, I wanted to kind of dig back on the 10% a little bit. You know, I think one of the

things that I see and have seen over the years is you get these new guys and they think, you know, they think that they can start doing deals with very little money, which they can do. And we've talked about ways that you can kind of do it. And then when they hear about the cost of marketing, they scoff and freak out. And, you know, I experienced it as well when I was an agent where new agents would come in, they say, well, I don't have the money to be an agent. How are I supposed to do this? And they don't want to do the legwork. They don't want to do the sweat equity stuff. And so they're stuck in this position where, well, how the heck are they going to get any business? And they, of course, are the, you know, I don't know what the failure rate is on agents, but it's extremely high.

At least I would guesstimate. And I think the same. applies to investors as well for the same purpose. I think there's an unrealistic expectation of the amount of either sweat equity or costs that it takes to really start finding really, really great deals depending upon where you are. So if you're in an area, yeah, we talked about people in Milwaukee, well, you can just look on the MLS and you're going to find great deals. But you're in, you're in Bakersfield, right, Michael? Yeah. So, you know, in Southern California, mid-California, deals aren't falling off the MLS. You actually have to work to get those deals. And the work is either money or sweat. And so I always try and tell people you have to have a good

expectation. And we'll have people who say, hey, I want to start today and say, oh, cool. Well, how much money do you have? They're like, oh, I don't have, I have nothing. I'm like, well, why don't you get a job? Start building up a, you know, I mean, you could certainly go the creative route. And that's, that's a valid way to go. but why not get an actual job, start building up reserves so that you've at least got cash in the bank, whether it's for marketing, for flipping, for anything else, just to have something. You know, I always, if I can go back to your statement of the attrition rate for real estate in agents, because it is large. You rarely see that second year or third year agent.

Right. But once they become one, those are the successful ones. So you can last 18, 24 months as a real estate agent if you haven't fallen off because of lack of funds. Then by that time, you've learned what you didn't know. So you can start learning what you don't know. You've learned now what you don't know. Oh, man, you're confusing us again. But wouldn't it be nice for real estate investors if we had that same opportunity? Yeah.

If we could go work for, you know, not the broker investor, but the guy or the gal and says, I want to learn this business. I just want to learn it. I just want to be around like-minded people. I want to learn what contracts are about. I want to learn, learn, well, why you sit at the up desk, or what do you say to somebody? But we don't have that in our industry.

Right. I mean, we have all the people that call themselves mentors and gurus and those kinds of things. You're talking about real mentors. You're talking about actual mentors, not the salespeople who label themselves mentors. Yeah. But, you know, it's, that was in a real advantage for me in the middle of my career when I did go get my real estate license. And I sat at the desk and I watched the people filling up their coffee cups and hanging out at the donut box. And I was asking myself, why aren't these people going to work? But they were at work. That was the problem. They were at work, but they weren't going to work. And I learned real fast that, you know, in our life, all we have to do is have the drive to succeed. Watch people who are. successful and do what they do. But most people watch someone who's successful and only want to do a part of what made them successful. So it's like, okay, well, I want to be a race car, but I don't want to put gas in my tank. Well, I can't. You're not going to succeed. And we have to kind of do

everything that everybody that's succeeding is doing. I think that's interesting when you talk about the real estate agents that were just kind of standing around and eating donuts and drinking coffee. And I see that, you know, in the real estate world as well, as, you know, they'll, I don't know, they spend hours on their website or on, I don't know, business cards or designing the perfect business card or designing the perfect whatever. It's like this idea of like, I feel like I'm being productive. I feel like I'm working. I feel like I'm making moves, but I'm really not. All I have to do is actually go out there and do some work. And I see that time and time again with people, especially brand new wholesalers or house flippers. I just, I see it all the time.

Yeah. And you hear about it. I mean, you hear about guys who'll say, hey, I want to get started. and I want to work in Bakersfield. Well, what do you know about Bakersfield? I don't know anything about Baker'sville. Well, you know, what do you know about, you know, what area do you want to target? You know, where do you want to farm? I don't know. Well, get down, get in your car, get on your bike, get on your rollerblades.

I don't care. Just get out and get to know an area. And then you could start working on it and figuring it out, right? I mean, that's just time. It's easier than that. And, you know, when we buy houses out of town, and we don't have legs on the ground out of town. But, you know, Google, you can drop down.

You can see the house. Trulia, and then I have some other data sources that allow me to actually see a lot of history on the houses and see the houses that are on the market and what have you. Being a broker, being a member of the board, I can join a board in California for a thousand bucks kind of thing. So I can get all the information that I need, but what I can't get is that that feel for value. So I can look at a CMA and I can say, this is the value of that house, but I haven't seen the house, except for the outside, but I don't have a feel for the street because I've never been to that street. So all I do is I just call a real estate agent, three of them, Prudential, Century 21, someone else kind of thing. And agents will actually go out and look at houses for me for free in the hopes that I'll list the house with them once I buy it, which I would, and give me a complete write-up on the house. and they'll do all my work.

And I love it. I wish there were real estate investors who were like real estate agents. I wish there was a place we could go as investors who seriously buy houses and say, okay, I have four people in Baltimore that I could call up and say, go look at this house for me. But we don't. Well, two things. One, CMA for those people who are listening and don't know is comparative, I believe,

comparative market analysis. And that basically I'll just kind of give you a, it's a, you know, it's an analysis of the area around a property essentially. And then to your point, I mean, that really is kind of what bigger pockets, one of the great things about bigger pockets. And I know tons and tons of people use it for that very purpose. Hey, I'm thinking about going to Milwaukee. I'm thinking about going to Miami.

Well, who's there? Let me talk to them. And now I have boots on the ground because I've networked and used the platform to do that. So I think it's there. But to your point, I don't think there's, it's not. necessarily formalized and it's kind of an organic thing more than anything else. And I think it would be awesome if there were more of a structure, which is, I think, what you're getting at where investors are more willing to kind of take folks under their wings in a mentorship role.

And maybe it was even formalized with, I don't know, I'm a certified investor mentor. Something to that point. From, you know, we were talking about direct mail marketing earlier, the costume, direct mail sometimes is larger than the ability to actually receive the leads and fulfill those leads. So just because someone can spend X amount of dollars doing it, doesn't mean they actually can do it from lead capture and lead fulfillment. But some of us don't have that issue, all the way up to that lead fulfillment, because that's where the boots on the ground really comes in. It's, you know, tell me what the house is. Tell me what the social network in that

is doing. And knowing that, we buy more houses. Those people that have a large marketing budget that would just plop themselves into any area. They would, they would absolutely enter that area without a problem because they know the mail is not an expense because of the rate of return that it has. And they buy more houses. And they put a lot of it, these new investors who are just looking for how do I get started? What mentor do I go to? That's the best mentoring program they could have is having someone who's marketing to their area, who doesn't know their area, and what you are is the gopher, which sounds horrible. But be the guy or the gal for me right there and tell me everything your I see.

If I could put a camera on your forehead, that's what I'd want. That's awesome. That's awesome. I agree with you completely. Yeah, I agree. Hey, so you mentioned earlier about the 10% we talked about that kind of you can get it, you know, you spend $10,000 on marketing, you'll likely make $10,000. However, if I go and take $10,000 right now, or let's say I go to take $10,000 in my hard-earned

money and I go and buy 10,000, I don't know, pieces of paper that say I want to buy your house and I stick them in the mail and I send them out to just like every door direct mail or whatever, you know, the post office or just go walk around my neighborhood and give it to every house. Chances are I'm going to not make my money back. I'm probably, if I'm just saying it to everyone, right? Well, we are still only about an 11% of our market. So in my city, I have 116,000 units. And by the way, if anybody's listening, know your numbers.

I mean, it's real easy to learn in a city. How many houses do I have? How many houses, how many of those are single family? Of those, how many have been owned for four years or longer? Of those, how many have 30% equity or greater? Of those, how many have one to three bedrooms? How do we know those numbers? How does somebody do that research?

The easiest way is create an account with list source, whether you buy it from them or not. Once you create an account, which is pretty easy, you can actually go in and play with the data. You can't see the actual result, like the address and the name, but they'll give you the counts. And you kind of have to start with your accounts. How many things do I have to market too? Well, so I have 116,000 units, but I only have 21,000. thousand units that I should be marketing to, what's 21 and 116? What's that ratio? One and six? Probably. No. Yeah, about one and six. Yeah, yeah. What percentage is that? 17? 18, I think. What did you say? What was your first number?

About one and six. Right. So, well, I have 21,000 and 116. Yep. So that's a, so that's about 18.9%. So if I looked at all my in my houses, then I have 18% that could be a benefit to me, 82% that wouldn't be a benefit to me. So if I went into a neighborhood and just handed out flyers or did every door direct mail, 82% of it would be a waste of money, right? Yep. And so let's assume that a piece of mail cost a dollar. And so now if you sent out 100 of those, you have $82 that was a waste, and then you had $18 that wasn't a waste, but you really have $100 spent on 18 people.

That's an expensive letter. So that's what the beauty of direct mail is. In 2008, 2009, when RESPA came around again, and it's been around forever. Explain RESPA really quick. Basically, the governing body that controls title companies and how they can, they give things away. Like in the old days of a title company, they would buy you dinner. They would buy you stamps.

They'd buy you stationary. They would buy you a car. They'd buy you anything that you'd ask them to buy you as long as you were a productive agent and you could send them money. What they determined was because the seller and the buyer are the actually the two people that are actually paying for the costs of escrow and title and all that kind of good stuff, RESPA came in and says, well, you can only give limited things to these people for. free because trying to entice them to do business with you because it's not them that's actually paying the cost of what you're selling and so when um they did all that and the core logic merged with first american title and we started instead of using metro scan for property searches we now went to the core logic platform the core logic platform because now they could charge for it

and realize they not give it away because if you gave it it away, it wasn't a worthy platform to build. Now they're charging for it. So now we know when people have equity. And it changed the whole marketplace from a marketing perspective. Am I getting too deep on marketing? Well, so you're saying that we can actually, we can actually now tell how much equity somebody has. Is that what you're saying? Absolutely. And the algorithms that they use, and they don't let us know what the algorithm model is, but the algorithms are pretty good. When we have a fast increase in appreciation, or decline in value.

We have to adjust on our end when we look at something and say, okay, 30 is really 40 or 40 is really 30, depending on what's happening. Like in the old days, I wouldn't go equity less than 40%, but now I'm comfortable with 30 because I know 30's 40. Okay. Because the algorithms haven't caught up yet. And this is something through like list source, right? Is that core logic or those two different things?

List source and core logic do the same thing. Okay. All right. So people can go to list or something, they can actually look for people only that have equity. Right. And then we remove corpse and trusts. Some people will still stick to trusts, thinking that trusts are owned by just mom and pops and not like-minded people. I don't like trusts, but I don't market to trust, but that doesn't mean other people don't. And I'm not even sitting on the fence of whether I would do it or not, but I do understand why they would do it. I would never. ever dissuade someone from doing it if that's truly what their marketing or what their model is. So we don't want to market to corpse or LLCs. Hey, Michael.

So yeah. Yes. So you're talking about marketing to folks who've got equity. That's kind of one target list. But there's other ways that people can go as well, right? I mean, we can target folks in probate. We can target divorce. We can target all these other things.

So what do you find? Go ahead. I think the question that's coming is, is, what is the best prospect groups out there, right? I wasn't going to go there. I was actually going to say... I was going to go there, but... Well, I mean, I was going to say, I think they all probably work,

and I think it's just a matter of becoming an expert on anyone or all of those different ways and see what you're best at. See what your marketing works best at in your area, I would assume. And, you know, if you try your hand at probates and you stick with it for a while and and you're not successful, try another one and another one. I mean, generally at some point you'll probably be successful, I would guess. But it would be interesting to hear what, at least from your experience, the best bang for your buck is. And maybe you could tell us about that.

Well, being a guy, you know, I've mailed out to the inherited list. I've not marketed to the probate list. at one point, it was really big on the 3060-90 mortgage-lake list. Yeah. A bucket load of foreclosures, naturally equity. Absentees. Yeah, absentees. So there's absentees in general, and there's absentees that are actually vacant.

And then there's FISBOS with for sell by owners. And then the expired list, people that had a listing with a real estate agent that expired. And now they're off the market for a moment. So I've marketed to all those. What I've learned in the marketing is they all are under the list of equity. So they, or I'm sure, I will back up. The ones that I want are also on my equity list. So I always tell people who come to me and they say, well, what do you think about marketing to expires?

And I said, it's a great market to market to, but pull your equity list first. when you get your expired list, cross-check your expires to your equity. If you have an expired that has equity, that's the one you want to market to. Because just because they're an expired doesn't mean they're a prospect. They're just an expired. So if you market to all of your equity list, you're marketing to everybody else anyway. You don't have to say divorcee on the equity list because, well, you can be a divorcee, but you're also an equity owner.

Right? That makes sense. So equity kind of covers everything. It's kind of a... It's like... Well, you start with equity. It's the fruit bowl. I mean, yeah, it holds apples and oranges and all this, but it's still the fruit bowl. And so if you're serious about marketing, you market it to that group, and for the longest time, you know, everybody preached absentee, absentee, absentee, absentee, absentee, for a couple different reasons, and I get it. But I'm not preaching absentee at all anymore. I think it's equally as a result. good as an owner-occupied equity. So it's the mom and pop that has a house they want to sell to go move someplace else. And for a while, we were marketing owner-occupied's

where someone on the deed was 65 years or older and they lived in the house for 15 years or longer. And we put those filters on it so that when that person wanted to sell, if they've been there for 15 years or longer, there's some deferred maintenance. So it's probably falling down. It was probably a family home, and now there's no family at home. So they don't need the four bedrooms that they had because there's just two of them now. They're 65 or older, and this 2,500 square feet run down home or home that hadn't been maintained is now ready to be sold. And then the other kicker is they typically don't need the money because their residence wasn't looked at as retirement income. Most people don't look at their personal residence as a thing they're going to.

going to retire with. And so there were deals to be made there. That said, if there's an investor that wants to do that, don't go out there and do that, you know, like 100% right out of the gate. Find out if you can actually communicate with that prospect group because it's one of the hardest prospect groups from an emotion standpoint to communicate with. And so, but if you get along with them and you understand them and you want to help them, then absolutely do it. Okay. So you're saying, just so I can clarify there, like, we can market to anybody that has the equity, obviously. But if we want to, you know, I don't know what's the word is pair that down, I guess, into a group that you feel most comfortable dealing with.

Is that what you would advise then? Right. If someone wants to go out, like your probate list doesn't, you know, your probate list doesn't mean they even have real property. So, yeah, the first thing you have to do on that is determined in the case, is it real property probate or just a probate transaction? Well, if there's real property attached to it, the next. thing I would look at, okay, is it at property on my equity list? Because if it's not on my

equity list, there's absolutely no reason to go after that probate. Yep, yep. Because they still just because someone dies, doesn't mean the loans go away. Yep. Yep. So, I mean, so if I like thinking of it in that way. I never really thought of it because I do not, like personally, I don't like dealing with certain types of people, with certain types of sellers. It bothers me. I mean, I don't know. Maybe probates one of them. I mean, I haven't done a lot with probate, but when people call me, I don't know. I just don't feel like that comfortable doing it because it's not my personality to be there. So I like that way of thinking of find the people that you that you enjoy working with and then work. Like I enjoy working with out of town or out, you know, absentee landlords.

I like that because I'm a landlord. I can identify with them. I can work with them. I help them. I understand the numbers really well. And that's just what I do. And other people are really good at dealing with probate. I know people like Sharon Vornhold.

That's her bread and butter. She's good at that. Like Sharon and Rick, I mean, if I were going to get into probate, I would absolutely be bugging the crap out of those two people. Yep. Because they have so much knowledge that they haven't even written down yet. I mean, and I don't think they're trying to hide it from us. It's just, you know, probate's not that big push. You don't see that big conversation about buying probates like you do on some of the other things because it's not a preached prospect group by a lot of the gurus on their.

their weekend shows. Yeah. So people are always going after, you know, absentee owners, which is really getting overused. So pick a group. Make sure if you pick the group that the group also has equity because, which is the problem with bandit signs, but one of the problems. Amongst others.

Yeah. Yeah. You know, I have bought houses because of bandit signs, but I've never put one up. And so if anybody wants to, if you, here's a little trick. If you don't want to put banit signs up, but want to buy houses. houses from that signs put their phone number in the phone book or under 411 google of i buy houses and we buy houses so get two phone numbers pay for the little white page ad and say i am i buy houses and i am we buy houses so because what happens is people pass these signs and they all say we buy

houses i buy houses everyone the signs say we buy houses i buy houses with a phone number they drive so fast and that thing is embedded in their brain. Now they would decide I want to sell my house. They go back. Someone's taking the sign down or the city's cut the sign in half. They can't read the phone number. So they call information for the I buy houses phone number or the we buy houses phone number and there your phone number sits. So what is it going to cost you? 25 bucks. It's like nothing, but you're going to get free leads because someone else but bandit signs up. That's interesting. It's kind of, I never thought about the 401. I mean, I mean, people do the same thing with online marketing, right?

Like, people go, they see the sign for we buy houses or I buy houses or whatever. And they go online, they type in I buy houses, you know, San Francisco. And people try to get their website to rank for that because that's what people type in because they see the sign. So again, you're piggybacking off of what other people have done to make that work. And, you know, the same thing applies for like, I do a lot of, not a lot, but I do a little bit of Facebook advertising. And Facebook advertising is kind of like bandit signs in that I'm advertising to everyone. I can't pick equity when I'm doing Facebook ads. So I get a lot of phone calls of people.

Like the other day, I talked to a lady who owed $142,000 on her house. And I went and looked at it and things may be worth 90. And like I looked at it and I'm like, there's nothing I can do for you. I mean, maybe I could try to work a short sale, but I had not even, it was a two-bedroom house. I can't even do anything with a two-bedroom house. So in that area. So anyway, I mean, I like that idea about direct mail, being able to get a list, like you talked about, a list that has equity that applies to the kind of person that you're interested in dealing with.

and then you market to them. So that's how we get the list. So then how do we, I mean, what are we sending to these people? We got yellow letters, white letters. I mean, what are options? Well, there are pretty much five options when you look at direct mail. So we have the yellow letter, which can be, and for people that don't know what the yellow letter is, it traditionally is a, it appears to be a yellow tablet lined paper that someone wrote on that

says, I want to buy this house, call this phone number. it appears as though you've pulled it out of the yellow pad tablet, folded in fours, and put it in an invitation envelope with a handwritten address on the front and a return address on the back, typically tucked into the back flap, so you don't lick the envelope and seal it, stamp on it and send it in its mail.

What it appears to the person receiving it is coming from like Grandma or Aunt Jane or someone that they know because it's in an invitation envelope, it's cute, it's friendly, and it is going to piss the people off sometimes. But it's what it does. I mean, and that is actually the power of the letter, because although it's pissing some people off, it's making some people happy. So you have both emotions at play. And so the yellow letter is a great thing to send out.

I would always send it out in any marketing campaign I was going to do. And then there are zip letters where if you've ever gotten a traffic ticket or like a corporate check coming from a large company, it'll be inside of this perforated envelope that you have to tear open and then the checks at the bottom kind of thing. Or the summons is at the bottom or the traffic tickets at the bottom. Those get open. They're great because it looks like it's important enough to get open and then you can tell the story. And then you have the postcard. And the postcards in our industry, where most industries like realtor industries, they'll do a lot of pictorial postcards. They'll put the picture on it.

And maybe they'll put some industry statistics on it. And then they're going to put some sort of other picture on it. So we call those pictorials. And then you have text postcards, which is really geared to what we do in life from an investor strategy, where we can talk to the prospect. And strangely enough, the market for text postcards, and the text postcard is literally just written format. It's just on a yellow piece of paper and sometimes they're on white, sometimes they're on blue, sometimes they're on pink, sometimes on green, sometimes on orange, mostly on yellow. And the reason for the yellow and the reason that the text postcard came about is it appears to be like a notice from the post office. You know, like you have a package or something.

those are all your little yellow postcard kinds of things. And so those get noticed because the worst thing about a small postcard is they're four by five and a half, which is a lot smaller than a lot of other things that's coming in the mail. And so we're playing off the color as a color associates to something that's important being a post office notice. But what's strange about the postcards right now that's happening is the industry has a tendency to move sideways. and up and down quite a bit. And we're seeing a lot of no phone number postcards. So somebody sending a postcard with no.

I'll remove that statement. We're seeing a lot of postcards with phone numbers that are intentionally not being answered. And the messages on the postcards is I'm not going to talk to you. When you call this number, no one will talk to you. And the people that are sending them out are getting really great results. on it. And it's a phenomenon. It's hard for me to understand and wrap my brain around. However, I try to wrap my brain around anything that's working. So there's a reason, by the way, it works is because we're building such energy into this mystical thing that's going to happen when you

call this phone number because we're telling them, call this phone number, you have a recorded message about your home. We don't even, we're not even saying on the postcard, we want to buy your house, which is what most postcards say. we're just saying we have an important message about your house, please call. And then they filter out through the voicemail of this long voicemail of why they wanted you to call them. And then what drops out of that is an opportunity. But what stays in that funnel is the ways of contacting all those people. Because all those people were on your prospect list, right?

So now you might have a buckle load of something else that you can market to. I don't know. So you're saying like people call that to get the recorded number and then now we have their phone number and you can follow up with them. Is that what you mean? Correct. And then some marker taking that phone number and then doing some SMS style and hitting them, you know, if a postcard costs 36 cents, a text message costs probably a tenth of a penny kind of thing. and you can set those up on auto responders and what have you. I'm not so certain our industry is completely there yet.

However, they are using a cell phone when they call, so they probably understand text messaging. And then the fifth piece of mail is a professional letter, which typically has logos on it. It's that normal looking, not invoice looking, but normal looking letter from an attorney kind of thing or someone important. And those have their place for certain. certain prospects. Like if I was going to do probate marketing, and it's one of the stages in my

short sell marketing that I would do. But they don't have their place in all prospect groups. Like I wouldn't necessarily send one as my first line of marketing to an equity list. It would be one of my later pieces. And I'm a firm believer that we should be mixing up our messages to all the prospect groups. I was just going to ask you that. Should we be sending like, because I'm assuming like if one of these worked industry standard for everyone, then we wouldn't have five. We'd have one. But because there's five, different ones work for different people at different times. So you're suggesting to send a variety. Yeah, it's bigger than that. There was a question post on Bigger Pockets, that outstanding website we go to. I'm, you know, I'm, I love it. It's like I called it my mistress the other day. Well, it kind of is. If you think about it, you can go have fun with this thing,

and you don't feel guilty. That's our new marketing line. That is it right there. Yeah, wow. Anyway, so there's a thing on bigger pockets. And someone, you know, they were talking about branding and just sending out the same thing over and over and over and over again. And I looked at the other side of the fence, Budweiser, no, Coca-Cola,

has 112 things you can drink. So they have 112 items that you can drink. So does Coke really need tab? That's one of the things they sell. But they have Diet Coke. Do they really need seven different waters? It's water. But it's water, right?

Why do they need them? Well, it's real easy. They want the largest market share they can get because they know some people love Tats, as bad as tab is, they love it. And some people love Diet Coke. And some people will live the square bottled water. And some people will like the blue round bottled water. And it's just water. And they know, wow, if we want to talk to all of the people out there, what do we do? Well, we send them a yellow letter. We send them a zip letter. We send them a postcard. We send them a different type of postcard.

And we send them a professional letter. And now we have the opportunity. to speaking to all of the different personality types that are out there. Because if we only marketed with the one thing that works, the yellow letter that works, let's assume that works the best for your prospect group. But what's best? 7%? 8%. Well, what about the 93% that didn't like it?

Yeah. Well, why don't we also market to the 93% that didn't like it? Yeah. And so we figure out, okay, what's the next chunk? Well, the next chunk's text postcard. So let's get that one. And sure, we can't market to everybody because some of the people just don't like anything. Right.

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Obviously, I'm assuming we're going to switch that up depending on where they are in our funnel. You know, is this our first or fifth letter to them? But in general, what are we kind of saying? And I know you had kind of talked about that pre-recorded postcard, but what about the other stuff? And I know that's very generalized because you're going to be very specific depending upon the type of marketing that you're doing.

But in essence, what are we asking these guys? What are we telling to these people? And I've only done millions and millions of pieces of direct mouth. So I only know what I know. What are you trying to say? You know more than us? No, but I only know it from, I only know this answer from the perspective of doing millions and millions and millions of pieces of mail. Right.

I don't know it from the perspective of doing a thousand pieces of mail. Right. So my experience tells me, irrespective of the prospect group, you know the same thing, the same message. because our message is, I want to buy your house. Now, in a yellow letter, we keep it very simple, very to the point, very directed. We don't brag about our corporate or LLC statuses. We don't brag about that we're going to buy it in a trust. We don't tell them how we're going to buy it.

We don't talk about sub two or lease options, any of those things. We say, I want to buy your house at this address, call this phone number. We can get a little bit more creative and add that I'm an investor looking to buy a house in your market or my wife and I are looking to buy another rental in your market. But what we don't want to do on the yellow letter is make it so long that it loses the prospect in the first or second paragraph. Because handwritten fonts or live handwriting, if you took someone's handwriting that wrote, that's about a 21 font size.

Well, we type it at 10 to 12 font size. so we can only say about half of what we could say, so it has to be pretty short, or we just run off the paper. That makes sense. Speaking of fonts, you mentioned font handwriting. Is that what people do?

I mean, how does that work versus handwriting versus typing a font? In the old days, we would take a piece of white paper, we would handwrite the letter, leave a space for the address, because I think the address, adding the address in the letter is more important

than the name of the person in the letter. So I can say, hello, neighbor. I want to buy our house at 1, 2, 3, Apple Street. And the 1, 2, 3, Apple Street's better than Dear John. Okay. But if I can do both, I want to do both. And then, so we'd write this letter out and whatever campaign we wanted to use. And we'd make a copy of it.

We'd then copy it on line paper. And then someone would come back that wrote the letter and they'd write in the John and the 1, 2, 3, Apple Street. and it would truly look like it was entirely handwritten. And then I think it was Apple that came along with all of their fawning ability and what have you and created some great things. And now we have the ability to create our own fonts. And from our perspective, we've created eight or nine of them. And so we can really take now someone's handwriting and make the letter look really handwritten,

but it's all fonted. then we have the opportunity to say, okay, do we want a font address on the envelope or handwritten address on the envelope? And I've done some tracking and determination. And, okay, is it worth spending the extra money to have someone handwrite something or just font it all out? And it is not worth writing something on the envelope over just fonting it all out. Yes, you're going to get a better open rate, but are you not going to get a better close rate based upon the expense. So if I could,

if let's call it a quarter to have someone write an envelope out, if I could take that on a thousand letters, that $250 I would have saved and put more marketing out on the street, I now have more opportunity on the street to buy more houses. Because what we're doing is when we buy a house, our cab costs are so large,

which makes our profit so large, that it far exceeds the cost of going that other route. So when you run the numbers like that, it makes sense. I'm not sure if that was your question or not. That's right. Yeah, that makes sense, yeah.

Yeah, yeah, no, it's fine. I just want to know more, dive more on the font thing. But, yeah, we have probably, like, I don't know, 10 more questions, like, specifically on direct mail that we want to fire at you real quick. Because these are really good questions that I want to get to, but we're never going to have time. So I'm going to fire you at you,

and let's do these ones like in fire round sequence sort of thing. Yeah, fair enough. All right. Ready. Here's the first one. All right. What are the top mistakes people make with direct mail? Not answering their phone or having an answering system set up. Okay. I like it. And then right next to that one is not being prepared for either the lack of calls or the abundance of calls. Because a lot of people, because they just want to do something, they want to be busy.

But they don't look at the in perspective. What's it going to produce? When you send out 14,000 letters, are you prepared for all of these calls? No. Or if you only send out 50 letters, are you prepared for that? Yeah. Yeah. Yeah, I think that's great. It definitely makes sense.

And I think it's great. I mean, this stuff is gold right here. All right. How many times should you repeat a direct mail sequence before you see results? And to kind of clarify that a little bit, I wonder if you could tell us through your data and your experience, for a deal, for the average person who's closing deals, is it the first piece of mail that results in a closed deal? Is it the third, the fifth, the seventh, or is that just really going to vary so much? It varies a lot because what happens with direct mail is if an investor

starts marketing into an area that's being marketed already, then their first letter isn't the prospect's first letter. Yeah. And so they're piggybacking on someone else's marketing, which is great. So we see a lot of, in a bigger, larger area, we see a lot of benefit to someone who can jump in and start doing transactions on their first and second mail piece. But if someone's in a small area where they don't have their peer group marketing with them, then they're going to be, you know, that two to eight sequence kind of thing.

And there was a day, I was sending out 16 letters within a 30-day period. I would get to an average of nine before I could pull them off my mailing sequence because we did something with them. Wait, so you're saying you did 16 pieces in 30 days, like you mailed them like every other day? We wouldn't do that today, but that's been part of my history. Today I'm mailing. Today I'm mailing, I call it my 17 cycle. If I have an address, and this is important for people understand, you have an address. So how long should you market to that address? You market to that address until they sell to somebody else, or they no longer qualify

to be on your list, and you determine if they're still qualified on your list every six months. So you pull your list in January 1st, and then July 1st, you re-pull your list. But in the meantime, during that six-month period, you've sent them eight and a half pieces of mail, and over the next 12 months, if they're still on your list, you're going to send another eight and a half pieces of mail. So you're going to be a 17 schedule on your marketing. So every three weeks. It used to be before we had this influx of appreciation or selling about a six-week cycle, but now it's a three-week cycle. We should be taking when we should be moving when our market's moving.

So as the market gets hotter and hotter and hotter and it is, we should be marketing more often. and then as it cools back down again, going backwards. We should never go over 90 days a product. And some people look at their marketing budget. You know, someone, one of you asked earlier, $10,000, what would they do with it? Well, that's, when you look at a marketing budget, you look at a 30, I mean a 60, I'm sorry, a 90 day period of time. What can you do over the 90 day period of time? So if you have $1,000, you really only have $333 a month to market with.

And then you have to be satisfied. Then you have to be satisfied that month one, that could produce you 10 times that amount, or month two, it could produce you 20 times that amount, or month three, it could produce you 30 times that amount, or you wouldn't have gotten anything the previous month. So we should always look at that, but then keep going. So it's not like you do three pieces of mail and stop. You keep going and going and going and going.

And then every six months, you repull your list. And if they're still on the list, then you hit them again. Yeah. And because some will, some will have sold to somebody else, which is why we redo the list. Yeah. At that rate, because in most markets right now, they're turning the inventory about 25%. And the list are expensive. The mail pieces are expensive.

The mail pieces start being more expensive than the list towards that six months. So you just get a new one. That makes sense. That makes sense. So what would you, I guess, suggest for people? Because we talked about piggybacking off other folks who might already be marketing. How would people stand out against their competitors in those areas? I mean, what if I'm in the same area as you are and I'm following, you know, I listen to you and I'm like, oh, this guy knows what he's talking about and now I start doing it?

I mean, is it just luck of the draw? Is it the message? Is it timing? Is it all the above? I think there is luck even when you're skilled and you have systems in place. Sure. Because we don't know who the prospect is. If we did, we'd only send out that letter or the motivated prospect.

But it starts with, let's say we have lead generation. So that's doing something that puts a lot of something somewhere for calls to come in. But right at that point, it's how are we going to capture it? And that's where a ton of people fall down. It's like, so the call comes in and they're at work or they're doing something else and they're doing something else. And then finally they call them back and I'm sitting at the kitchen table buying the house. Yeah. It's like.

And that's because you're answering the phone and the vast majority of other people you're saying are not answering their phones. Yeah. And you can prove this to yourself. If you're in a marketplace, look on Craigslist or look in the newspaper for people that say I want to buy your house and call it. Call them. Call them. And you don't want to answer. I've done that a few times just because I think it would be funny to like call somebody and

I want to see how they handle the call. So I do it from time to time. I call bandit signs or a call. Yeah, ads, I've never had anybody answer, ever. It's always got out of the voicemail. There's been times, you know, I've set out the kitchen table to get the contract signed. And they, you know, they say, well, so-and-so was here yesterday and he gave us a better price. And then, you know, back into the call, so-and-so was here yesterday.

And he gave you a better price. Then why am I here? No. I ask them, well, why didn't you buy it from them? Right. What was it about them that you felt that they couldn't fall forward? Yeah, there was an article I read online other day that said people, it was like a sales article on entrepreneur.com or something like that. And it was about, it said people don't buy what you, like what you're selling. They usually buy it because of who you are a lot more than, and I thought that was interesting. Well, which is, you know, it goes back to the first podcast where we were getting into how do you actually communicate with people. And some people took offense to that, which I was kind of surprised, but I guess that's normal. But at the same time, it's so valuable.

I mean, you really need to learn how to speak to people and what questions to ask and then ask the questions. And be prepared to buy a house. and most people aren't. Yep, yep, I agree. I think that's awesome. Josh, did that answer your question? It totally did. It totally did.

And listen, everything that we've dealt with, everything we've covered in this show so far, it's been fantastic. And, you know, truth be told, Brandon and I are sitting here on the shared doc that we've got all our notes on and we keep crossing things off the list. So even though you're not specifically answering them as we asked them,

you're actually answering them as you talk. So it's awesome. All right. So we talked about voicemail a little bit earlier, and you should try to answer your phone as much as possible you're saying. However, you can't always, like you said, this is a job. This is a business. You don't work 24-7, 365. You can't answer your phone even if it isn't a job, 24-7.

So you always have to have the backup plan in play. And sometimes the backup plan in play is answering your phone. And that's a weird statement to make. because if you can't answer all the calls all the time, shouldn't you set a system up that the majority of the calls that you can't answer are the primary calls and the ones you can answer are the other calls? Because if you can give everybody the same experience, then you have duplicatable results.

I'm not looking at, well, I think he's talking about having, you know, if you can't answer it, well, at six o'clock, be having a service that answers it? Either a service, a voicemail, a system in play that answers the phone for you and carries out a series of tasks that you've set up in advance. And those tasks feed you something that you've set up so that you can fall forward. But even if you answer all your calls during the day, let's assume that's a case, you can't answer all your calls during the day.

You're going to be at lunch. You're going to be sleeping. you're going to be doing something or you're going to be on the phone talking to a seller anyway. So if you're going to send everybody else to a voicemail, then I think it's extremely important to set up that voicemail or that call service answering service system and make that as good as it can be and then answer the calls that you want to answer. I'm sorry to cut you off. I was going to say, well, what does that mean? So are you talking about finding a way to actually filter the calls somehow before? you, I mean, I'm imagining, which would be amazing, that there's some system that would actually,

you could pre-program in all the phone numbers of the people that you somehow managed to get from the same list that you got from list source, say. And now when that call comes in, you know it's Distressed Seller A, that's got X amount of equity. And then it flashes and you're like, oh, well, this guy, this call, he barely had equity. I'll let it go to voicemail. I mean, it'd be amazing if that were possible. Yeah.

It would be amazing if that were possible. Yeah. But yeah, that's not. I'm saying is most people don't spend enough time with their call capture system. Okay. And as equal amount of time that it takes to set up that marketing program, you should set up your call capture system. Gotcha. Because you can't market, I mean, you can't talk to everybody at the same time.

And if you can't, then what's the best experience you can give them? And I think it's, it really just depends on what your buddy. budget is you can go to Pat Live or a company like that and have an answer. They absolutely have their negatives. You can go to a voicemail and either do a really sweet, innocent, fast voicemail, which has its negatives. You can do a long, drawn out why I want to buy your house, voicemail, which has its negatives. Everything has a positive, but there's good and bad things with everything. You can live answered as much as you can. You can whatever you need to do. I choose in my business, because I think buying houses where you make 50 grand is pretty good,

that I choose to have staff members who sit there, and they're paid to sit there between eight and five, and answer my phone. And they're running off of scripts. They're doing the work that needs to be done with the call that comes in. And then at that point, we can take it from there and actually go and find out if we have an opportunity. But I also know they're going to miss calls.

So the calls that they miss is they go to a voicemail system that has a short message that the person can leave, comes right back to those attendants. And they're told to call those people back within 15 minutes of that call coming in because we know that person's fresh. And then following up and set an appointment. So assuming they answer the five questions right. So and then on weekends, everything goes to voicemail because we don't work weekends. And I know some investors, that's the only time that they can work. so if that's the time that they can work, then they work weekends. I've always wanted an investment business that wasn't,

I wasn't a slave to my business, and that kind of seems like slave business. Hey, Michael, so good information. We're wrapping this thing up. We really have one last question for you, and I think a lot of people can relate to this particular one. And I think this explains why a lot of people don't answer their phones. Okay.

What would you suggest for a newbie who's trying to overcome the fear of answering their phone, how to actually go ahead and do it? That first phone call is petrifying for a lot of people. And so what advice do you have for the newbies who are listening about how to prepare for that call maybe or what to say or what to have at the ready for that first phone call? I've always said that you should have a script and you should have the scripts on you. whatever script you want to use. And we use a short one, we use a long one. And over my years of doing this, we have three or four different scripts. But learn it.

And how do you learn it? I think you memorize it saying it really fast 10 times in the morning to yourself. And then 10 times at night to yourself, you'll learn it. You try to memorize it, but it still needs to be your voice, your tonality, your way of speaking. Because you need to be able to ask questions without looking at something. and that fear is a great thing. We either have fear of being successful or we have fear of not being successful. So you have to ask yourself, what am I afraid of?

Am I afraid that I'm not going to be successful or I'm afraid of being successful? And if it's the, you know, so you play on that and you go, okay, it's not, okay, my fear is just fear because I don't know how to do something, but I want to be rich. well, get over it and just answer the phone, go practice, find something to practice with. You know, call strangers, go call, you know, 312555-1-2-1-2 and ask someone, you know, if they had a house for sale. And, you know, they're going to say all kinds of things to you and hang up on you and call you your idiot and all these words. And then pick up the phone and do it again. You know, practice on people who don't matter to you so that when calls that you've spent money on, come in that do matter to you, then you can talk to them.

It's great advice. These people have spent so much energy, mind energy, money energy, time energy to get to where they are at. And man, not being prepared, it's crazy. Yeah, that's awesome. I think that's a great way to end this thing. That's great. All right, Mike, well, listen, we really, really, really, really appreciate the time.

We're going to skip the fire round. We're going to skip the famous four. we've done those and we've done them within the last like months so I don't really see any point but this has been fantastic we've covered a ton of content a ton of material and and we really really appreciate you giving us the time we also obviously appreciate you spending time with your mistress that is bigger pockets of course and anybody listening who has questions about marketing direct marketing Michael's always amazing he's always one of the guys so we'll jump in and help out.

So feel free to do that guys on the forums or obviously on the show notes at biggerpockets.com slash show 81. Last thing, Michael, before we kick you out of here, where can people find more about you? And you do have a company that does this stuff, that does marketing. So feel free to give a quick little plug here.

You know, we didn't cover marketing hardly at all. And shame on me for getting so long-winded because I'm passionate about it. So if anybody wants to really learn about marketing, all they got to do is call me. I told everybody last time to call Norma, and she now has a dartboard and a picture of me on the wall. And darts, and so I have holes in my face from Norma throwing darts at me. So call the office, ask for me. They'll probably set you up a time to actually talk with me.

You know, I'll spend an hour, an hour and a half, two hours. I will absolutely set up a marketing program for you that you can fall forward with. And I'll absolutely be honest with them. If I don't think they should do direct mail, I will tell them, don't do direct mail. Or if they shouldn't do yellow letters and do a postcard, do postcard. I'm not in it for my success. I'm already successful. I'm in it for their success.

Yeah. And let's make them successful. So just call yellowletters.com that I wasn't supposed to say. Or maybe I was. Well, no, you can say it now. We just, you know, we don't want the show to be a big old. Yellowletters.com. There you go.

Check it out, guys, yellowletters.com. Michael, thanks so much for your time. And we'll see you around on the site. See you around on the site. All right, thanks, Michael. All right, guys, that was show 81 of the Bigger Pockets podcast with Michael Quarles. I'm sure you guys noticed there was not a famous four. And we specifically did that because we'd have.

already done it just a few weeks earlier. And we didn't see the value of regurgitating said information to you. Otherwise, that was great, Brandon. I mean, I was certainly impressed with the amount of information that Michael had to share. And as I always am, he's fantastic on the forums. Yeah. Yeah. What I like about Michael a lot is that he goes deeper than just the how to, right? It's not just do this, send this letter. Here's why you send it. Like, Michael always goes deeper into like, what does it actually mean? Because a lot of times just telling people you need to send this X, Y, Z out doesn't always work.

Everybody's got a different scenario. So I love that he kind of shares the background of why we do things and how to do them starting from nothing. So great. Yeah. Yeah. And, you know, obviously we were kidding about it. But, you know, some of the answers tended to be verbose. But I think that's because he's been around for so long.

and has so much knowledge. And in fact, you calling him old? I am, I am, now that he's not here, I'm calling him old. What do you say about that,

Michael? No, he's been around and he knows, he's listening, he knows what he's doing. And yeah, it was great. So anyway,

big thanks to Michael. If you are a bigger pockets member, obviously, you know that you can connect and interact with Michael on the forums. He's on there pretty much every day, as he called it, Bigger Pockets, is his mistress. And you can find tons of other amazing, amazing, brilliant people hanging out on Bigger Pockets,

their mistresses as well, sharing lots of great information. And for those of you who are not, that's why you need to be doing it. These guys, these folk are really, really good people. And if you're not on there, engaging, asking them questions, picking their brains, you're missing a lot of the fun and you're missing a lot of the value of the site. So definitely encourage you to do that. You know, it kind of breaks my heart sometimes.

You'll see guys who jump on the site and they'll participate for like a couple days and then you never hear from them again. And then, you know, you'll find out three, four, five months later that they quit the business. And, you know, you'll ask them, hey, what happened? Well, I just, you know, I wasn't, I didn't have the support.

I didn't have this. And you're, you stop and you say, well, you have this monster support group. You have all these people who can mentor you and help you and be there to guide you. If you're sitting there silently, you're not getting that. So here's my reminder to anyone listening who's either not signed up yet for bigger pockets or who's on bigger pockets and hasn't really stepped it up and started to connect with people. You've got to do it. Because you're going to find so much value. You're going to find so many great people to help you and help you grow your business. So I definitely encourage that. Sorry to go on and on, but I'm really

passionate about this. And it's so exciting watching people's businesses grow because of their participation on our platform. With that, as always, like to remind you, we've got our Facebook, our Twitter, our Gplus, our LinkedIn. Definitely jump in, follow us there. We share all sorts of cool stuff and content and news and other fun things. And hopefully you'll participate with us there. And beyond that, that's it. This is show 81 of the Bigger Pockets podcast with Michael Quarles. The show notes you can find at biggerpockets.com slash show 81. And I'm going to let my friend Brandon take us out of here.

Once again, Bigger Pockets podcast, show 81 in the books. This is Brandon and Josh, signing off. You're listening to Bigger Pockets Radio. Simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, Without all the hype, you're in the right place. Be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online.

Thank you all for listening to the Bigger Pockets Real Estate podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify, or any other podcast platform. Our new episodes come out Monday, Wednesday, and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K. copywriting is by Calico content, and editing is by Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.w.w.com.

The content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk. So use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose. And remember, past performance is not indicative of future results. Bigger Pocket's LLC disclaims all liability for direct, indirect, consequential, or other damages arising from a reliance on information presented in this podcast.

I'm going to be the next.