Epic Real Estate Investing - Cold Calling Is Horrible. So I Tried Inbound Leads – Here's What Happened | Brent Daniels | 1368

Episode Date: October 20, 2024

In this episode of the Epic Real Estate Investing Show, host Matt Theriault welcomes Brent Daniels, a seasoned wholesaler and real estate investor with a wealth of experience. Brent shares his compelling journey, starting from the transformative influence of "Rich Dad Poor Dad," which sparked his interest in real estate. He recounts his evolution into a licensed real estate agent and how he navigated the tumultuous waters of the 2008 financial crisis by strategically adapting to the REO market.   This insightful conversation highlights the crucial shift towards inbound lead generation, emphasizing the need for rapid response strategies and streamlined processes in today's fast-paced market. Listeners will gain valuable insights into the unique challenges posed by competitive landscapes, the importance of targeting intent-based leads, and the need for careful budget management in uncertain times.   Brent also discusses the necessity of effective communication, especially during market fluctuations, and how environment and discipline play significant roles in achieving success. The episode delves into the distinctions between local and virtual markets, offering practical strategies for thriving in the wholesaling sector.   As a bonus, Brent shares resources that can help aspiring investors elevate their game, including his engaging YouTube channel and the valuable insights found at talktopeople.com. Tune in for an episode packed with actionable advice and inspiration to transform your real estate investing journey! Learn more about your ad choices. Visit megaphone.fm/adchoices

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Let's go. All right, please help me welcome to the show. Mr. Brent Daniels, Brent, welcome to the epic real estate investing show. It's about time, man. I know it. That's all I'm saying. You've been doing this podcast for 57 years, and is the first time I'm on here? This is ridiculous.

I agree, 100%. I have to get with the booking agent. We've got so many mutual friends. I can't believe this is like the first time we really got to connect. Yeah, this is really great. It was great seeing you in Florida. And I've listened to your show so many times, your podcast. I mean, I think I was listening.

listening to your podcast driving around, doing my driving for dollars in like 2016. Has it been around that long? Oh, dude. We're celebrating 15 years this month. We started in 2009. Yeah. So, I mean, it could have been earlier than that. Yeah.

We were old by 2016. But thanks. That's right. Appreciate it. I've seen you around. I can tell you your wholesale to boatload of properties. You helped a boatload of people sell a wholesale of a boatload of properties. Now you've got a marketing agency.

It looks like I see that comes up. on my Instagram all the time. I think the app was listening that we were talking in Florida. And now it's like, hey, here's Brent again. And here he is again. So that's fantastic, dude. Congrats on all the success. Thank you. You know how that works, right, Matt? Because our phones are close together in the same location. They start sinking. And then all of a sudden I start seeing yours. You start seeing mine. That's how that works. It's remarkable. Yeah, bring me up to speed. How did you get into this whole mess of real estate investing? This is going to be a story that comes all the way back around.

But in 2000, when I graduated high school, my best friend's dad, who was a business mentor, they always had the fancy house. He was always building businesses. He was like the entrepreneur dad in the group, so to speak, all the rest of the dads with their buddies

kind of worked regular jobs. And he gave us rich dad, poor dad. And that just blew my mind. And I'm 18. I'm like, wow, this makes a lot of sense to an 18-year-old. And then I went to college and kind of dropped it a little bit, but always kind of kept coming back to it, especially my last semester in college. And that's when I really started to do my own personal education, right? A lot of times, you know, when you're in college or high school or even beyond college, if you're in some sort of university, you're kind of bogged down and using that as your education.

But once you're getting to the end of that, you're like, wait a second. I like learning. I hate school, but I like learning. And so I started picking it up again. and got a real estate license in 2004, screwed around, thought I was awesome until 2008, because the market was, the wind was behind my sales for four years and then lost it all in 2009 for closing five houses, got two cars, repoed, divorce, lost the dogs, the whole thing, and then had to fight and claw my way out and started being a real estate agent,

again with Remax helping them sell their REOs, their real-eos. estate owned properties, if you remember those times, Matt, I'm sure you do. And the whole market in Phoenix was foreclosed homes that the bank owned. So I would the every home that we listed had the, you know, a sign in the front yard and had a number. Well, all those numbers, we had like a thousand listings. All those numbers came to my cell phone. And so I was running around all the time, just showing people houses, helping them buy these like $40,000, $50,000 houses that are now $400,000 houses here in Phoenix, but I was just kind of running around being an agent, and then that dried up. The REOs kind of filtered out over a couple, three years, and I went door knocking to go find

some deals for investors, and that's when I discovered the beautiful world of assigning contracts, aka wholesaling. And since then, it has been phenomenal. It's been the main strategy that I use for building a real estate business and what I teach on. And I think it's a great strategy for people that are starting out that, you know, don't have the experience, but they want to be able to understand, is this a deal or not a deal? And I think that's the first step out of three in being a really good real estate investor is find deals. Yes, I hear people kind of use their exist strategy as their identity. You know what I mean? Yeah, sure. Like I'm a wholesaler. I'm a fix and flipper. I do lease options. They I'm a subject to guy, whatever may be. It's like,

no, you're a deal finder first. You know what I mean? You're a deal. deal finder first and then you figure out how you're going to make money from it. But I totally agree. I think that's like the only thing in real estate that's not a commodity. You know, that's where the skill is. That's where the money's made. So as today is looking, lots of deals, no deals, minimal deals. What do you see it in the market right now? Yeah, it's really interesting, Matt. In 2021, if you look at the Google stats on people searching wholesale real estate, real estate investing, 2021 was the peak. Now, if you look at the Google, search results, it's about 20% of what it was in 2021.

And we've seen it in our own market, less and less people coming into the market. And so we're just hoovering up more deals. But I've made a huge switch, Matt. I was always the cold calling, door knocking, be proactive, keep your budget low, marketing guy. And now I've transitioned to all inbound leads, which is much different. So you got outbound leads, you got referrals, and you got inbound leads. and the inbound leads are from your market. I mean, it just costs a lot more.

You have to have your process is really refined. You have to have the right people. You have to be very fast. And you have to be able to recognize what a deal is really fast. So not for people just starting out, typically. But now in our business, we've transitioned completely to inbound, which is really lightened up the load on my acquisition team. It's less leads per deal.

which has opened it up for more capacity to spend more to get more leads up at the top of the funnel that are people ready to go. When did you make that transition started going to inbound? You know, I started 2020. So I started last year around January. I recruited a guy, an incredible guy, Jesse, from Google. He was working for Google ads and running a bunch of the big campaigns through this company called T-Tec. And I recruited him over to just work in my company. to run PPC, right, to do the paper click with Google.

And it's been absolutely phenomenal. So he was able to look at what are the best websites, what are the best keywords, and then bring that knowledge into my business day one. And it's been huge. That's awesome. What is your cost per deal right now with the Google ads? About 5,500 to 6 grand, right? That's pretty typical.

I mean, six grand's on the high end of this year and 5 grands on the low end. but it's between, bounce it's between 55 and 6 grand typically. Yeah, yeah. Steel size is 24. So it's a 1 to 4, which is not awesome, but at scale,

it makes a lot of sense. For sure. For sure. Yeah. So we'll spend 60 grand to do 10 deals a month from it. Yeah, then it does make sense for sure. That makes sure.

It makes sense at the first one. So if someone was looking at that, to spend that kind of money, just say like everyone you can count on that or what needs to happen first or anything? No, I mean, listen, there's no guarantees at any part of this business, but I will tell you this, we work with incredible wholesalers, flippers, investors, and other markets.

It's nowhere near as expensive. Phoenix is just wildly competitive. We have some really amazing companies that have been established for a long time that know how to spend money, and they have their processes to be able to complement that. So if you don't have the processes, is you're just wasting money. If you can't respond to an inbound lead in 30 seconds,

I don't care if it's 10.30 at night on a Sunday, you're going to be missing out on income activities, right? Or just incoming income. And so you've got to be able to respond to it really, really fast and have people on your team that would be able to respond really fast. So Monday through Friday, 8 to 5, Ryan, my acquisition manager and Chad are taking those calls. And then from 5 to the morning till 8.000.

in the morning. I've got Joshua covering the night shift and weekends. And so I've got it all covered throughout the whole week because pay-per-click, I mean, it could be coming in at any time. And if you miss it, it's a missed opportunity for sure. So you have your actual acquisition people doing that, not like an answering service overnight. It never worked for me, Matt. It never worked for me to have, you know, they're collecting the data, but they're not doing discovery. And the first conversation you have with an inbound lead, 80% of that conversation is discovered. Right. Why are they selling it? Why are we on the phone right now? Why did they go to our website? What's happening? And they want, it's almost like their roof is leaking and they're calling a roofer to come fix it. That's the mentality that we have. The discovery process, I feel, is lost with a service just from what we've seen. Someone that, say, we're running ads and didn't have that 24-hour service, what would be your recommendation to them just play with the adjustment or adjust of the spend and when it happened? wake up.

Wake up and take those calls. Get up. Yeah, listen, you're 24-7. I mean, if you're going to do pay-per-click, if you're going to do intent-based, which I believe is the top of the pyramid, besides referrals, obviously referrals are phenomenal and wildly profitable,

and you typically don't have a lot of competition. But intent-based leads, oh my gosh. I mean, coming from a world of cold-calling and text message marketing and mail and TV and all these other lead sources. I mean, PPC, they're ready to go. They're ready to sign a contract within that day.

And then you're closing in 30. So your cash cycle is so much faster. So it's a huge marketing channel for us. And so if you're going to go with that marketing channel, you need to be available. And you could use a call service. It's better than not taking the calls for sure. We do a lot of research and investigating

because my Instagram fee is filled with all of these different pay per deal or pay per lead type services. Yes. And I met a guy, are you on CG, Brett? You are? Oh, no, no, no, not CG. So I was there just, what, two weeks ago, three weeks ago. And I met a guy, there was one guy,

property leads. Do you know that guy over there? James Hodges, I think. And really cool guy. I'm going to be ramping my own personal business up again. I like to always do it during the holidays. I think there's a lot more opportunity there because so many people check out for the holidays.

but I'm kind of like trying to see how I can manage my time and leverage my time the best. And so I've been investigating and interviewing a few of those people. I found one guy there in CG spends $80,000 a month on the paper lead thing. And he says it's the only way to fly. Like it just makes sense to him. And I was like, wow, really? That's only one person I found that has said something like that.

But I don't know, have you looked into those and compared those to the PPC doing it yourself? Oh, yeah. I really find a time perspective as well as a cost perspective. Yeah, the paper lead, it's very similar to PaperClick. It just depends on where they're getting their leads. That's the issue that I have. Because it's been a big explosion in Paper Lead, some of these leads are not like intent-based.

They're not searching. They're coming from Facebook ads, which is more interruption marketing, which is a totally different lead. Or they're doing it with YouTube ads or something like that. And so it's not the search. When I say intent-based, they're literally searching. I want to sell my house fast for anybody that's confused by that.

But the paper lead, we've done all right. We did it for six months off and on. Well, six months and then another six months. It was like a two-to-one return for us. The nice thing is you can get refunds. If you can't get a hold of them, if they're not really good leads, you can get a refund. But it does degrade your account, the more refunds you get. so you'll get less and less leads,

the more that you put in that you want refunds. So that's something to consider there. And also, I like control, man. I don't want you coming into my market, putting the paper lead up to $600, and now you get every lead and I get none. Yep, yeah. You know what I mean?

If you have $2,000, at least $2,000 a month to probably $5,000, I think paper leads perfect. I think if you have more than $5,000 a month, then you should go pay per click. But that 2,000 to 5,000 sweet spot for people that really have tight congested schedules, maybe they're just building momentum or maybe they're doing a deal a month or deal every couple months.

I think it's perfect because you can turn on and off your account. So you go to bed at whatever or you want to shut it down at 8 o'clock, you press it off. You're not getting leads in the middle of the night where you could miss out and then you turn it on when you want it on. Speed, which is really cool. Yeah, that's exactly how I saw it. It was someone like myself is a full-time two other things. So if I'm going to do that, I need to have that kind of control.

And then just the fact of being able to get a refund was like, wow, really? If that happens, that's in the real world. So, well, I'm going to give it a run for. Well, it's a credit back. It's a credit back. Sure, sure, sure. Yeah, I don't want the money back. I want a better lead.

So, yeah, I'm going to give that a run, the 90-day run starting November 1st. So I'll report back and tell you what my experience was. Yeah, I like the guys that property leads. Yeah. There's a bunch of them. When they all have a little bit different methodology. So I think I'm going to put some money into like three or four of them and then compare and maybe they'll make a great YouTube video. I don't know.

But yeah, that's what I'm thinking. So someone coming into your world, Brett, that wants to become a wholesaler, I guess in hindsight, more is probably the better question. Those that have succeeded and those haven't. Well, I think there's four factors to look at when you're starting out. One is what market do you want to go after? Is it big or small? do you have a budget for marketing or are you just bootstrapping this and you're going to trade your effort for the leads as opposed to money for leads?

What is your schedule like? Are you part time or full time? And what's your availability? And then what is your sales experience? I wouldn't even say people think sales is just like literal sales. My best acquisition manager was a police officer for 12 years in Scott's sale. You know what I mean? Like you need to know sales to be a police out.

You need to know human communication. That's all I mean by it. Like, were you a nurse? Were you a teacher? Were you somebody that was communicating a lot to different personalities, right? If you have that experience, great. So based on those four, it depends on how you go after the properties and what your strategy is. And so I think the people that understand that one and are realistic about their schedule and time block when they're going to be able to commit or are ahead.

of the others. If there's ones that don't succeed versus the ones that do succeed board up, the ones that succeed, definitely time block. And the second one, they change their environment. Right, Matt? You have to be around people that are doing this business. If you're not around people doing

this business, you're going to go to dinners and happy hours and barbecues and family reunions and you're going to be on fire about investing in real estate and being in a wholesaling real estate and finding great deals. And your best friends and families' eyes will glass over because they will have no idea what you're

talking about. And that could be very, very, very, very frustrating. So you've got to be around people that are doing this business. You have to change your environment to be able to know that it's real, to have that accountability and to also be able to answer the nagging questions that pop up as you're going through the process. And the biggest thing I would say is there's a difference between want and have to. You know what I mean? There's a difference between motivation and discipline. Discipline takes you place as motivation can't. And if you have to do this, if you have to not live an average life, if you have to change the financial trajectory of your family, if you have to not work for somebody else and have control, those are the people that make it. People that want to

do a deal here and there, they can do it, but it's not going to completely dramatically change their life. We have a pretty strict protocol on who will let in and who will work with as partners. But I still think about when I got started, I don't think I would have qualified for my own program. Like, I wouldn't have let me in. But that half to that you just said was there. I was like, like, get out of my way. And so I struggle sometimes like saying you can't come in because I think, like, what if that's me, right? But yeah, I think that's key. I mean, you have to do it. it. And I think that's really kind of what makes the difference as well. When you're looking at markets, everyone thinks their market is ultra-competitive. Everyone thinks their market is ultra-saturated.

So how do you guide your students or your clients on which markets to go into? And like, what is your opinion based off of local market versus virtual? I mean, I would say besides Manhattan and Miami, it's wide open. I think the person and the company that has the highest skills and the best processes win. So if somebody's doing better than you in your market, their process is better. Their skills are better. That's all it is. Because you see that it's happening. They might be spending more than you in marketing, but if you're going on the same appointment with other people and they're beating you out, their model or their skills are better. That's going to happen in any market. Yeah. Yeah. Now, I know that there's more markets where you can get a higher return on investment,

but they might have a ceiling in how many deals you can do. I think people that worry too much about what market they want to be in, just answer the question, where do you want to own real estate? Know that market. Is it your backyard or is it somewhere else? My experience has always been that there aren't as many investors there that you think. And though that are there, they're not doing what you think they're doing. And I know half of them won't even pick up the phone.

But when you talk about processes, just make it a process to pick up the phone quick. and then you'll probably be better than most of your market anyway. That is some of the best advice of all time. Yeah. I'm telling you, the people that communicate fast and effectively with enthusiasm are light years ahead of everybody else. It is shocking how many people won't pick up the phone or return messages. Yeah. One of my best friends, my mentor, Tom Crowell is notorious for this.

Tom Crowell has, I don't know, a thousand, text messages he hasn't even that haven't even been opened. He's like Tom, what are you doing? Tom's a businessman. Tom wants to run the systems and be on the right side of the income quadrant. Right. It's crazy.

He would be a terrible sales guy for my company, for sure. So you do a lot of the flipping. What do your holdings look like? How much are you holding anything? A lot of wholesale. That's the same thing to me. We're flipping paper. You're right.

Well, I just, you know, it's interesting, Matt, because I feel like, fix and flip, there's so much emotion involved. And I'm not even talking about like the flipper themselves. There's certainly that because I've done that for a couple years and I've flipped over 100 properties, but I've done way more in wholesale. But it's the emotion of like the market. Right? Like even right now, as things are political and everything, it's like, wow, people are on the sidelines because they're waiting for this or they're waiting for that or they're forecasting that certain things are going to happen and it's just so emotional. I'm like, just find a deal and sell it to somebody

else and let them deal with it and not have to worry about the emotions. The numbers work or the numbers don't work. That's why I love wholesaling. And so from a rental, I'm not a big buy-and-hold. I've bought into a holdings company that develops storage units. So we've got 800 storage units here in Arizona with another 4,000 that are being constructed. I've got two rental properties. I got this commercial building. I've got a cabin and I've got my house. Got it. And I got a bunch of crypto. Yeah, well, that's good. I had a bunch of crypto. Yeah, right. I have a different philosophy on the flipping, but we probably end up in the same place is that it's not necessarily the emotions I want to stay away from. It's the people.

Meaning, if I look back on all the deals that I've lost money on, it wasn't because of the real estate. It's because the people that were involved. It was the contractor. It was the property manager. It was, I always say real estate is safe. It's the people that are risky. So give me the strategies that have the fewer amounts of people. But I guess that is the same as emotions because the people create the emotions, right? It's our highest expense in this business.

Yeah. Our emotions and the emotions of other people, but mostly ours. And how we deal with those, there's a day where you lock up an unbelievable deal. And then there's a day where you lose an unbelievable deal. You know, nothing goes perfect. But that makes it exciting. and it makes every day different. And I think it adds to the longevity that you can have in this business because it's never the same.

Always changing. You know, you mentioned a little bit about what the market is doing, the emotions and the politics. What do you think the market's headed up right now? You know, in Phoenix, we're picking up some inventory. We were at under three. I always look at is it under three months inventory or over three months inventory, right? The amount of active listings divided by the amount of pending or under contract listings gives you the months of inventory. So I know that if it's over three months, the fix and flippers that we sell to

get really nervous. Oh, my gosh, the sky is falling. I don't, I'm going to pause on buying whatever or I need to buy it this amount. I will tell you that the increase in concessions has affected the price points that we've been able to offer and what the cash buyers are willing to offer so that it all adjusts. And the inventory is picking up. So if it keeps picking up, up, it's going to slow down. If things start getting absorbed, then it'll do what it does. But I think we're probably in a pretty flat market for a little while. We'll see. Yeah. But I don't care, Matt, right? Like, if it's a good market, a bad market, and I know that it's easy to say that, especially for somebody that coaches and teaches and that and has a coaching and teaching company,

but in a good market, you have to talk to people. In a bad market, you have to talk to people. In a flat market, you have to talk to people. So why don't you focus on the skill of your ability, to effectively have conversations and make offers and just adjust your prices. That's all it is. The issue is you run into, and I don't know if you experienced this, Matt, but there's like either 30 or 90

or maybe six months at the very max, but usually it's about a quarter where there's like, oh, the sellers still want too much and the buyers still want too low, right? And you have to get the no-brainer smoking hot deals that used to make 50K on. You're now making 20K on it.

And you're going to do a little bit less deals. It's going to be tighter. you're not going to be pumped about it. It's going to screw up your whole budget, and you're going to have to deal with that. And most people, unfortunately, have not planned for that 90 day where there is kind of a lull in the business,

and then they go out of business because they just can't. They can't keep it up. Or they have to fire everybody, or they have to stop their marketing and kind of regroup. And so you're talking about that transition period, like between one market's drift, right? Yeah.

Between markets. Yeah. We saw it happen in. 2022. The sellers kind of always the last ones to get the memo, it seems like. Of course. Well, sellers don't understand who determines value, right? It's a ready,

willing, and able buyer. You can list your house at whatever you want. If somebody's not willing to pay you for it, then it's not worth that. So sellers always think their property's worth more, and buyers always want to get a smoking hot deal. And we play in the middle of that, which is exciting.

For sure. Well, Brent, it's been an absolute pleasure. Let's stay in tight And let's do it again. Yeah. If someone wanted to get in touch with you and learn about what you're up to and what you're doing and potentially work with you, what's the best way for them to do that. Yeah. So we put a lot of love into our YouTube channel, Brent Daniel's YouTube channel.

So definitely check that out. And yeah, if you're interested in payper-click, go to talk to people.com. Speak. I might hit you up over there here shortly myself. We're ready for you, Matt. All right, partner. Be good. I'll talk to you soon.

Bye-bye. And that wraps up the epic show. If you found this episode valuable, who else do you know that might too? There's a really good chance you know someone else who would. And when their name comes to mind, please share it with them. And ask them to click the subscribe button when they get here and I'll take great care of them. God loves you and so do I. Health, peace, blessings, and success to you.

I'm Matt Terrio. Living the dream. Yeah, yeah, we got the cash flow. You didn't know home world. We got the cash flow. This podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com