Epic Real Estate Investing - Powerful Marketing That NO ONE Is Doing - Chris Arnold | 914

Episode Date: January 31, 2020

This Friday, Matt is joined with Chris Arnold, a co-founder of a successful wholesaling company, COSA Investments, a founder of Arnold Elite Realty (a cutting-edge boutique brokerage) and REI Radio coaching program. In today’s episode, our guest shares not so popular yet powerful marketing tool that helps him generate leads massively! Tune in and find out more! Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening. If you want it faster, visit R-E-I-A's.com.

Here's Matt. All right, hello, and welcome to the Epic Real Estate Investing Show. Glad you found us. If this is your first time here, welcome. If it is not your first time here, welcome back. And here we are at the end of the month. The first month of the new year is over. And I don't know, how are things going?

Have you checked in? Panning out the way that you envisioned it on New Year's Eve. And I kind of ask that question because I'm at top of mind right now. that I woke up early this morning and I almost never checked Twitter, but today it said I had a notification. And I'm not some big celebrity or anything like that. So anytime I get notified on Twitter or mentioned on Twitter, I'm like, uh-oh, something's up.

It's a real deal. It's something's going on. So I checked it out. And it was somebody that was just acknowledging episode number 850 of how much they enjoyed that. And that was a while ago. So I had no idea what 850 was about. So when I got to the gym, doing my last. around the, they got this indoor track. It's really cool.

And, but I'm doing my laps. So I said, let me go check out and see what episode 850 was. And it happened to be the Thanksgiving episode that we released on Thanksgiving. It was about gratitude and how to do, foster an attitude of gratitude, kind of just some practices that you can do, but some also like business practices that where you can get tactical and, you know, generate revenue for yourself while you're also fostering that attitude. And there was one little quote in there. So I see why it was his favorite, and I really needed that today, too, and I appreciated it. And so thank you for bringing that up.

But there was one little meme in there that I'd mentioned is from MC Light on that day. And I've got a great guest for you today, by the way. We'll get to him just a second. But my mind is really present here. And there was a meme by MC Light, one of my favorite hip-hop artists of all time, very old-school artist. And I might butcher the actual quote, but it said, if you're not changing it, you're choosing it. And that was just, I remember when it hit me. that day and that's what inspired that whole episode.

And I thought about it today as we are wrapping up the first month of the new year, the new decade. And yeah, is it panning out the way that you wanted it to? Because if it's not and you're not doing anything about it, understand that you are choosing it. So I started to think about that. What can I do to change the outcomes that I'm getting at this very moment? And so I'm taking that on.

Because if I don't change it, I'm choosing it. And then that was like a little bit more of a painful realization. So something for you. Food for thought. Anyway, got a great guest for you today. He is co-founder of COSA investments, one of the largest wholesale companies in the Dallas-Fort Worth Metroplex. It's operated and managed by a U.S. virtual team, which has allowed him to run his company while living in Tulum, Mexico. Absolute Paradise.

If you've never been, highly recommend it. He is also founder of Arnold Elite Realty, which is a cutting edge boutique brokerage consisting of a team of seasoned agents. And he's got a passion for coaching and mentoring entrepreneurs that's led him to the creation of the multiplier's mastermind. And most recently, he launched his REI radio coaching program. It's a program designed to teach real estate investors the marketing stream that everyone knows about, but no one is doing. So we know that we're all about lead generation here, right? It's the engine that drives your whole business. If you don't have leads, you don't have opportunity.

And if you don't have opportunity, it's not going to be a very good business for you. So I brought him on to share what he knows about that, to see if there's something there for you. If no one knows, no one's doing it, it's most likely a good place to go. So please, without further ado, help me welcome to the show, Mr. Chris Arnold. Chris, welcome to the Epic Real Estate Investing Show. Matt, what's happening, man? Good to be with you today. Hang it out.

Talking shop. Talking shop. Yes. And, you know, it was back in September, I think, or October where we got to connect and talk a lot of shop back then. And one of my things was to, I wanted to connect with more people. I want to stay engaged. You know, over the last couple years, I've become a little bit of a recluse,

a little bit of a hermit, just kind of stay in my own little world. doing my own thing. And I was like, you know what, I need to connect more with good people, strong people, smart people. And sir, you qualify. So I'm glad you made it on the show. Hey, man, I appreciate that. I'll take that compliment. Great. So I read a little bit about you. What's really important that we should all know that I didn't mention? That's a great question. I think for me, you know, the driver for everything I do is I view real estate as a vehicle, right? It's a vehicle that provides, you know, elements of freedom, you know, freedom of time, freedom of resources, you know, freedom of location, freedom of thought.

And so, you know, for a lot of people, I tell them, you know, real estate is not necessarily my passion. People are my passion. And real estate allows me to be who I need to be and really provides a platform for me to be able to focus on what I value the most. So, if you ask me, you know, you know, if you ask me, you. what drives me. You know, you're talking about community and being around great people and brotherhood.

You know, I'm just extremely social. And so, you know, I love real estate because I think it's a great, great vehicle to allow us to do what we really are passionate about. Yeah, I agree. I think I have almost given that exact speech verbatim before probably multiple times in the last 10 years. We've been hosting the show that, you know, it's called the epic real estate investing show. but it's really just a money show, a financial freedom show, disguised as a real estate show. Exactly. Right?

It's the vehicle that provides all of that. And it's the vehicle that's done it for more people than anything else. And so if you just look at the statistics, in my opinion, it's like, if that's what you really want is financial freedom, you might as well go and get involved in where the odds of it happening for you are the greatest. Right. And that's real estate. because I really don't care about the real estate either. I'm not passionate about real estate.

I'm passionate about what real estate allows us to do and what it provides, right? A hundred percent for sure. Great. Now, for that to happen, we have to find discounted real estate, right? And discounted real estate, meaning because we've got to buy low, sell high. We're investors. That's what we've got to do. And that's kind of how it works.

So lead generation, right? Because we're not going to find a lot of opportunity on the multiple listing service. That's kind of the retail space. and there's a lot of different websites out there, but because the website and the internet is public, that's kind of the retail space also. We've got to go direct to seller. And so we talk a lot about lead generation here.

And one thing that I don't think we've ever touched on, if we have, it's just been in passing, is the radio, right? So tell me, how are you using the radio to find motivated sellers that are resulting in discounted real estate? Yeah. So, you know, Matt, believe or not, we've been utilizing radio for nine years. Okay.

And what has surprised me. must be working. That's why no one's sharing it. Right. Exactly. But you know what does surprise me about it is it's a radio, it's a source, it's a channel that everyone knows about. I mean, radio has been around forever. But the actual application of it to find discounted properties has pretty much gone unused. And a lot of people will say, you know, well, is radio still applicable? Like don't people just listen to Spotify? Don't they listen to Pandora? And I go, yeah, you probably do, but you have to realize you are not your demographic.

You know, the primary demographic in the U.S., if you look at most, you know, investors, you know, previous closings, they're over the age of 50 normally. And those people do not have Spotify downloaded on their phone. They still listen to the radio in their car and they still watch television. And so when you begin to understand, saying that that's your demographic, then you go, wow, it's interesting that radio has gone untouched, but yet it's the thing that my avatar, my demographic obviously listens to. Right. Not your demographic. It's so key, right? One of the common questions is,

why would anyone sell to you at a discount if they could just call a realtor? And like, that's not your demographic, right? You're not looking for that person. You're right. No one in their right mind would not, would call the, would sell it to you at a discount if they didn't have to, right? So, yeah, taking yourself out of your shoes and putting, how is it, you're trying to put the seller in your shoes, you need to put yourself in the seller shoes, right? Is what we're saying. Perfect. Okay. So radio sounds really expensive.

Tell me about what's the accessibility for the average person to get involved in radio. Absolutely. So this is one of the reasons, you know, people go, well, why haven't people go? on after radio. And I think that there's a couple of assumptions on, you know, when you think about radio. And one of the big ones is this, it's not affordable. You know, in order for me to get on radio, I have to spend $5, $10,000 a month to get started. And that's actually a myth. You can pick up a radio station starting out about $1,000 to $2,000 a month. My very first station, Matt, that I picked up was the total cost of $1,500 for month. And Matt, I'm in Dallas, Fort Worth. That is one of the most

competitive and biggest radio markets in the country. And if we can pick them up at that price and obviously other people we've helped do this, you can get in with a good budget of $1,000 to $2,000 to get started. And you know, as I do, Matt, most people are paying more than that with direct mail. Oh, yeah. And direct mail saturated. I mean, that's one of the biggest challenges. You know, we've trusted indirect mail in the past. Again, a lot of people are doing things like ringless voicemail, text blasting. But what will cause a lead generation source not to drive your ROI is how many people are doing it. And you can be doing it really well. But if that poker table is overcrowded, it's going to be tough for you to win. And so it's always about jumping onto a lead generation

channel where no one is really doing it because if you don't have competition, obviously your ROI is going to be much greater. I mean, that's the key. How can I do something that no one else is really doing and just remove the competition? And, you know, as I do, there's virtually no competition on radio right now. All the time I ask, you know, as I talk to them, well, who's doing radio on your market? And they stop for a second. They go, you know what?

I can't think of anyone that's doing it. And I hear that again and again around the country and all the different cities that are out there. Right. No, you're right. I can't remember the last time I heard something like that. But, you know, I listened to good radio stations. If you're getting $1,000 to $2,000 a month, you couldn't be on like a real radio station, right? No, absolutely.

You are. So define real. No, it has to do with the size of the audience, right? Again, we're not going after stations like Kiss FM, right? that's got, let's say, a listenership or a million above. Right. What we're looking for is what we call those small to mid-sized stations. They're great stations.

They're stations that are owned by big companies like IHeart and Cumulus and CBS. You have to remember, those companies just don't own the big stations. They also own some of the mid-sized smaller ones, and those are the ones that we actually go after. So these are legit FM stations that we're advertising on, not some, you know, obsessive. obscure little AM station that nobody's ever heard of. Right, like public radio or something like that, right? Yeah, exactly. Got it.

Okay, so 1,000, 2,000 a month on a mid-sized station on FM. How many spots does that get you a month? Yeah, so that should be having you run 100 spots per month. So the way that we advertise is we advertise five spots per day, five days a week. 25 spots a week. And so if we're doing that over a four-week period on average, that's 100. So you're right. Back the math into that. If I'm telling you that we have a station for $1,500, that means that each spot, 60 seconds, we picked up for $15. So just like we do real estate wholesale, we buy radio wholesale. It's the same thing. And you know as well as I do that if you get it at a

discount like a house, if you get that part right, pretty much everything past that will fall into place. But if you overpay for a house, it doesn't matter how great your back end is, you're probably not going to make any money or lose money. It's the same thing about radio. And that's what we teach of how to go in there, negotiate with these stations, and pick these things up at rock bottom prices. Nice. That's the secret sauce. That's what we've done. Very good. And most people don't realize that you can do that. And actually, the radio stations don't want you to know they can do that because they want to sell you retail. And you don't go to a station and say, hey, how much do you charge for an ad? Because they're going to come back three to four times what you should be paying. You go to a station

armed with the right information, the right reports about that station, and you tell them, hey, based on what we know about you, these reports, these statistics, this is what we're willing to pay. take it or leave it. And again, they need to sell radio airtime, and so they take them. It takes a little time sometimes to negotiate, be patient, persistent, but as we say, they always break eventually and come down to that price. They just don't want you to know that. Sweet. Well, we know all advertising, all marketing works. The big variable is what's the message, right? So what is the approach on a radio ad that catches the right person's attention? Yeah, it's just like you would imagine. It's, you know, we buy houses for cash. You know, we close

quickly. It's that whole idea of a convenient close. And it's the emphasis on, man, doesn't matter the circumstance. You know, you were talking earlier, you know, about how to pick up a property. And the way that you get a discounted property is circumstance, right? Circumstance creates the deal. And so in a radio ad, you want to lay out those circumstances, you know, have you an inherited a house. You know, do you have a junkie house? Do you have a house going into foreclosure? Are you a landlord that is tired of dealing with tenants? All of the reasons we are able circumstantially to pick up these houses discounted? That's what we put into the ad. That's who we're going after. That's the demographic is the circumstance. Super. So you're identifying the target market and the issues they're

dealing with. Exactly. And they hear that and they go, man, that's me. I'm tired of being a landlord. And then they position yourself and position yourself as the solution. So you're good. Exactly. All right. So good old fashioned stuff. Nothing magic or tricky there. What have you found to be the best call to action in the ad?

Is it a texting thing? A call this phone number? Go to this website. How does that work? That's a great question. It's always going through the phone. So we actually don't want to put a URL. We don't want texting.

We don't want web forms because what we have found is it is one of the highest quality leads we've been able to generate. Think about it. Someone is driving down the road. They hear an ad on the radio and they pick up the phone and call you. They're serious. Let's compare that to direct mail. We know that over 50% of the calls that come in on direct mail are complaint, right? Stop mailing my house, right? Whatever they tell you to tell you that they're unhappy that you're spamming them. Imagine just removing all of that from direct mail and getting quality calls. That's what radio is like. So it is a much more motivated lead. So one of the most important things to remember is to answer these calls live. Got it. Got to answer. Catch them live and set that

appointment, get that contract signed in the moment. Because again, with radio, it doesn't advertise and then you get a call a week later from that person that heard it. They're normally going to call you right then or within the first 24 to 48 hours when they get back home. So we're talking about a quick turnaround. That's always good. That means quick money. Yeah, and that's the other thing. You know, traditionally with some of the other marketing channels, you have to wait,

you know, let's say six months for it to get up and going. You know, I think a lot of people think about radio, well, don't I have to build credibility? No, because the first time your ad plays, that listenership has never heard you. And this is an audience. Remember, this is important. most marketing right now is what we call list dependent right matt everyone's fighting over the same list now i might text that list i might rvm that list i might direct mallet but that's what's creating the saturation is the fact that everyone's trying to get the best list right right when you advertise on

radio you're hitting people that are not getting hit on these lists and so actually the highest call volume comes in normally within the first 90 days before it levels off to what it's going to be long term. So it's an immediate hit. Ads go up. Call start coming in the first week. And I don't know about you, but man, that's a great thing to be able to do is throw something up and get leads coming in that quickly. Not a lot of other marketing pieces can do that. Right. No, definitely. So I was going to ask, so you get that big influx initially and then it levels off. I would, I mean, logically, I would be thinking that you would be creating some sort of brand awareness in your market and it could snowball even go the other direction. Absolutely, it does. It's when you start to utilize multiple stations. So there's two things that

happened. I'm glad you brought that up. You know, one of the things is you have the ability to build a brand on radio. You might not do that through direct mail. Definitely not going to throw your company name on a bandit sign, right? So the challenge is with some of these spamming type marketing that people are doing, they're missing out on the opportunity to brand because they don't want that negativity attached to their company. Well, with radio, you absolutely want to brand yourself and it does two things. The first thing is it creates celebrity status, right? So think about where do celebrities come from? They come from radio and they come from television. That's why we have celebrities. There's something psychologically that happens in our mind when we see someone on TV or hear someone on the radio. And then we

see him in person or we talk to them, right? It's like, oh, you're that person out here on the radio, or you're that guy or that woman I see on TV. We call that celebrity status and that doesn't happen with all these other traditional marketing channels. And then the other thing you get, Matt, is what we call instant credibility. And that's the idea that if you are advertising on radio, you must know what you're talking about because you're on radio. People automatically attach the idea of you being an expert because you're on radio. It's just an assumption. So that puts you ahead of the competition in your area if you go to head to head with another wholesaler because you're walking in the door with celebrity status and instant credibility,

which the other wholesaler you're competing against does not have. And that helps conversions and definitely helps build your brand and your name. Got it. Well, gosh, Chris, it just sounds like a total utopia out there. You think I've been doing it for nine years. Right? Okay. So what's the con? What's the downside?

What's the negative? Yeah. So if I were to say any negatives on radio, and man, they're not a lot. You know, as I help people set it up around the country, that's a question I always ask when I interview them. You know, what don't you like? You know, a couple of things I would probably say is, you know, the challenge is negotiating with the radio station. So that can take a little bit of time because it's like dealing with a seller. you know, not all sellers are willing to sell to you at a wholesale price.

You got to work the system, right? You got to work the seller. You got to know your pitch. And so sometimes with the radio station, it can take longer for them to break, right? So that's one thing the setup can take a little bit longer, but that's why we encourage people to go in, negotiate three to five stations at one time, which increases the probability. At least one of those is going to crack quickly. Got it.

So that's one thing. And then probably the only other thing I would say that's, you know, minor is you definitely get some retail calls, right? You have someone that hears the ad and goes, well, before I call my local real estate agent, I want to see what this person is willing to do on a cash. But again, if you're smart, you have a system to capitalize, and I believe every wholesaler should, the ability to either put people on the cash bucket and give them an offer or throw them on the retail side and take revenue from there. Definitely don't throw retail leads in the trash. That's another source of income. But we get some retail calls, but that's probably the only two

things that really stick out to me. Awesome. Oh, cool. Shoot, you got me scratching my head. I'm just my pull the trigger here in my hometown right now. The other thing, you know, Matt, is it's automated, right? It requires very low maintenance. So let's compare direct mail.

And there's nothing wrong with direct mail. But again, you're constantly tweaking your postcard. You're constantly dealing with the mailing company to win to drop, all that type of stuff, constantly having to knit your list, build a better list, and then you're having to manage the back end of all of those calls coming in when more than half aren't even legit. It's what I would call a heavy system. And you're constantly having to redrop your mail and change things. With radio, once you set it up, you set it and forget it.

You just let the ad play. The station does that for you, and you don't really have to go in very often and tweak things, right? And so from that standpoint, it becomes automated, which creates greater consistency in market. You know, marketing, I hear a lot of people go, you know, I do direct mail and I drop it three or four times and I get busy and I stop. I forget to send another one. Right, right. That doesn't happen with radio because it's not dependent on you to make sure you deliver every week. It's just to set it and forget it automated process.

And so that's, in my opinion, what creates great consistency with it. Sweet. You know, that's definitely key is the consistency of your lead generation because it leads to the consistency of your opportunity, which creates the consistency of your income. Nobody likes to be on that income roller coaster. Sweet. So what am I missing? Anything? Yeah, I mean, I think people really want to know what type of return that they should see.

That's really, really important. Yeah, so if you got 100 spots running, right, what kind of call volume would you expect from 100 spots on a month? Yeah, so I'll compare it again to direct mail, something like that. It's on the other side of the spectrum. DirectMell is what I would call high call volume, low quality, right? The other side of the spectrum is radio, which is lower call volume, much higher quality, right? So you don't get slammed with a ton of calls like direct mail, which makes it much more manageable. And so again, depends on the station you're advertising on, but the best way I could say it is it's just a good, healthy amount of calls. It's not overwhelming. And for someone that's listening, you know, people go, well, if I'm newer to the whole selling world,

should I do this? And I go, well, if it's just you and you don't have a staff and you're wearing every hat in your company, this is a great marketing source to begin with because it's affordable and it's going to be easy for you to manage. It's not like another source in which is going to require a lot of time to tweak things. And then, you know, dollar per dollar return, right? This is the way we measure. That is the most important metrics or KPI when looking at any lead generation source. So here's what I know. And any CFO will tell you this, right? If you're spending, let's say, over $5,000 a month consistently on any lead generation source, if you're getting three to four dollars back for every dollar you spend, that's healthy. That's good. And again, I know we're in the real estate world, numbers get fluffed, and people go,

I'm getting $8 return, $12 return. I'm suspicious, right? Three to four is healthy. Now, if you're spending under $5,000 a month on something, let's utilize direct mail, right? You send $2,000 worth of postcards. Of course, your dollar per dollar return is going to be above $3 to $4 because the law of averages is working in your favor, right? One closing just paid for that for an entire year.

So what I can tell you is for us in Dallas, Fort Worth, our marketing budget right now is 27,500 a month on radio. That's what we spend. We average and maintain right at a $3.50 return, which is healthy. Now, people that I've helped set it up around the country that are spending under five grand, they report back to me that their dollar per dollar return is more like one to five, one to seven. But again, they're not spending a lot of money, so of course, it should be higher. But, man, $3.50 cents, in my opinion, off that type of budget that we're spending is good, particularly from the fact that it's consistent. It doesn't go way up and down, right?

That's the problem we have with DirectMell in 2018, like in Dallas-Fort Worth. You know, it's just like bottomed out because it got oversaturated. And we were dependent on it and getting that good 1-4 return. And then all of a sudden, that dropped down to like a one out of, 220, right? And it's like, what happened? I just have not ever seen that on radio. It's just consistent. It's tried and true. Well, good deal. If we've piqued somebody's interest and they wanted to get in touch with you, Chris, what's the best way for them to do that? Yeah, so, you know, we obviously have rolled this out to help people around the country set it up. We know right now

people in 2020 are nervous about things like texting and RVM. You know, there's a sense that that potentially could go away legally or from a tech standpoint, they just shut that down. Depending on the market, right? Direct mail depends on where you're at. It might be a little bit challenging. So right now, the market's hungry for something new. We know that. And so that's why I felt like it was a good time to kind of roll this out. And again, it doesn't affect us. I'm in Dallas-Fort Worth. So someone advertises in another state, right, doesn't affect my business whatsoever. But if it's piqued your interest and you're like, now, I'd like to learn more about this. I'd like to, you know, ask some questions, do a little

bit deeper dive. Like, I'm a due diligence guy, right? You know, it's always like, this sounds really good, you know, what's the backside of it, et cetera. You definitely want to make sure you do your due diligence, but, and you would just go to wholesalingink.com forward slash R-E-I radio, and you can literally just book a call and get in and ask some questions. Again, Matt, we're doing actually a limited amount of people. So we don't want it to get saturated. So we're limiting the amount of people per market so that we can preserve it. You know, same for me, right? I don't want it to come back and, you know, get overcrowded in my market, right?

So that's why we're going to limit the amount of people. But the people that jump on, man, it's going to make a big difference in their business in 2020. Sweet. So wholesaling, inc. com. I didn't know that was you. Yeah. Word slash R.

Yeah. So I work with Brent Daniels and Tom Cole and Cody Hoffine. So I didn't know that. I'm a coach over there as well. Absolutely. Well, sweet. All good peeps. That's why I like you all. Yeah. Because y'all work together. Those are great guys. Totally, totally. Perfect. All right, man. Been a pleasure. What's,

what are you most excited about in this new year? Well, I'm most excited because we have all my boys coming down for the mastermind. So you know, I live in Tulum. And so next week, we have all of our guys coming down for about five days. And so, again, I'm social, right? So the idea of getting all of those guys together down on the beach in my backyard, having a mastermind together, man, I'm getting giddy. I get in this time of year because we have a lot of fun together. Perfect. Community, right? Just like you talked about. When you're a great community, it's exciting. Yep. You know, I took a, I did landmark education probably about a decade ago. I don't know if you've ever heard of it before. This is a curriculum of a way to live life, right?

And one of the distinctions they have inside of there is that your possibility lives inside your community. And it doesn't exist without conversation. And so it's something I've just always, there's so many things that I got from that, but something I've always just really remembered and held on to was that, you know, if you're short on opportunity or things aren't going the way you want it to go, like get into a community and start talking and sharing. And that's where the real magic is created. So that's why these mastermind things work.

And with you at the leadership, I bet that's an amazing one. So good luck with that. And have a blast. And let's stay connected and stay in touch. And let's do this again. Yeah, Matt, thanks for having me on, man. Good to hang out with you. Good to see you today.

Awesome. Thanks, Chris. All righty. So that's it for today. God bless to your success. I'm Matt Terrio, living the dream. Yeah, yeah, we got the cash flow. You didn't know home boy.

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