The Science of Flipping - Episode 158: Best Real Estate Wholesaling App!

Episode Date: December 27, 2019

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Welcome to the Science of Flipping podcast. I'm your host, Justin Colby. Welcome to the Science of Flipping. And for those of you guys watching this on YouTube, if you're watching this on Instagram, if you're a part of the Science of Flipping, and for those of you guys watching this on YouTube, if you're watching this on Instagram, if you're a part of the Science of Flipping group, welcome. As you see, I have a very, very special guest with me today. As I mentioned previously today, we are going to do a training, not just education, but a true training with my man, Dave Ledko, the founding partner of Deal Machine. What up, dude? What's happening? Hey, it's good to be here, Justin. Thanks for having me. Dude, it is my pleasure. I've been doing this for a really long time, not just investing,

but also educating, training. And one of the things that keeps coming up over and over and over again is how to get lead costs down, how get deal cost down and in my opinion there's nothing better than door knocking cold calling text messaging is your top three and the reality is deal machine actually has two of those top three in it and so I just really wanted to talk about how to best or knock how to best cold call, the strategies behind deal machine, and where you're seeing your clientele get the best results. So I kind of wanted to offer that up. I know this has been around for quite some time, but I'm telling you now, the reason why I have David on here is because for those of you that are just getting started,

maybe, maybe you're a newbie, Maybe you're trying to break into the industry. Maybe you're trying to get your first deal or maybe you are an experienced investor and you're like, how the hell do I lower my lead cost? How the hell do I lower my deal cost and get more deals? I'm telling you now, this is the way to do it. And so I brought the founder on just to give you guys a little something, something and teach a little bit more about it. And so let brought the founder on just to give you guys a little something, something and teach

a little bit more about it. And so let's just start with the premise of what Deal Machine is, as I believe it is a game changer. The team uses it when they're in the field. It's incredible. Let's start there and then we'll continue going from there. Yeah, absolutely. So Deal Machine lets you look up a property owner on the spot with your phone and then send a piece of mail or skip trace them to call them or text them right on the spot. That's right. And that's all in the app, right? Yeah, it's a mobile app. Yep. It's right in the app. So one of the things that I come across, I was just at our boardroom mastermind, which is fantastic. We have 100 investors from across the nation in there. And again, kind of back to

the reason why I even called you and asked you and begged you to be on this is because you're busy. So I had to beg a little bit, which I respect. But the other part is like, I just really need people to understand what are the best systems? What are the best tools? What are the best strategies? That is quite literally what the science of flipping podcast is all about. That's what I'm trying to help educate on in our masterminds. And so what I went over there, which I will go over here is I believe for anyone who is looking to either get in the game, get started, has a small marketing budget, or maybe they have just a little bit more marketing budget that they can start spending, where would you spend it? I want to tell everyone now, I would spend it on

door knocking and finding the property to door knock. I would then skip trace those properties and cold call them. Since I'm already skip tracing them, I would then follow up with the text message. These are the three ways I would get into the business if I was a newbie and or if I was very limited on my marketing budget. These are the exact strategies I would personally be using in my business if I just needed to spend some money but don't have a $20,000 marketing budget. And so, again, let's dive into like what the app does and how to efficiently use the app. Because the reality, just like Podio or something, you know, any of the apps that you're using, you could do it on your phone.

And let me first talk about how my team uses it. And then maybe you can talk about how your most successful clients use it and how it all works. Fair enough. A hundred percent. Yeah. Yeah. So, so good. You go first and then I'll tell you, you know, maybe what we're doing and we'll go from there. Yeah. So whenever you're using the app, what you want to be looking for is distressed properties. So you want to go find for is distressed properties.

So you want to go find and add properties that look run down. They've got really tall grass, or they've got a tarp on the roof or a broken window, or they're just maybe not the best looking house in the neighborhood. It doesn't have to be a completely torn up house, but maybe you're in like a A, B neighborhood and you can see one house like hasn't trimmed their bushes in three years. And that's a really good one to add. Does that make sense? Yeah. Yeah. So I call it maintenance deferred, right? So we utilize that method now that the, what we layer over that for those of you who want to is I actually will pull a list of the pre foreclosures, right in in Maricopa County. And then you can even pull it within cities like Phoenix versus Glendale, etc. Right. So there are several list providers and now you know, they're from motivated sellers, geo data, I mean, there's, you know, you name it, there's so many list providers. And what I'll do

moving forward is I'll give everyone a part of this group that follows me all of the system tools that I use and where to go get it. So I'll give you guys a list with links to just go get it, right. So I go and get a pre foreclosure closure list. I start there, because then I will filter for me, but my team will filter where their day is and circle the pre foreclosures in a very specific surrounding area. They start there, they need to hit five foreclosures or pre foreclosures in that area. And while they're in the area, they do exactly what David mentions. Then they go and try to find what I call maintenance deferred, right? Just the homes that look,

they don't have to be extremely dilapidated. They don't have to be like falling down, but you can tell no one's maintaining it, right? They just don't have a care anymore to maintain their home. So between that, they're usually able to get anywhere from 20 to 40 homes in a given day because they're sticking to a single area. They're not driving from,

you know, one part of town all the way across to another part of town. They stick to three to five pre-foreclosures in a small area and then circle that market finding the dilapidated homes. 100%. Yeah. And I would just add to that, when you're adding those maintenance deferred properties, if you want to get a deal, I always say, if you're going to test out driving for dollars at a minimum of 200 of those properties, just to give a benchmark. I know you have that goal of those five pre-foreclosures. On our side, when they're actually adding distressed properties, we want to see you add at least a minimum of 200 properties. And that's just to give you an idea so you don't quit too early, you know, and miss

out on getting a deal. Yeah. And so what I have found is roughly by the time they're able to hit a hundred doors and tell me what your numbers is, roughly a hundred doors can equal a deal. Now it's not a hundred pre foreclosures and it's not just a hundred, you know, maintenance deferred homes. It's just a hundred doors total. And it's because I specified it, those two, for those of you out there that are just maybe walking neighborhoods and knocking every door in a random neighborhood, I can't speak to those conversions and KPIs, but I can

speak to if you're going after maintenance deferred and pre-foreclosures for every hundred doors you hit, you should be able to get one deal out of that. Is that what you're finding with most of your clients? We always say at least a minimum of 200, but a lot of our clients aren't door knocking. So if you're door knocking and talking to the person right there, that's going to be a bit more effective than just giving a call or, you know, a text or a piece of mail. So I could understand how those numbers would make sense. Yeah. And so, you know, what else can you do through the app? So you say your clients may not actually knock on the door, by the way, I'm going to call it what it is. If you're not using this app and knocking on the door, you are missing out on the real gold.

I say that because every other investor doesn't want to knock on the door. No one wants to go door knocking. I'm telling you, no one does. But if you have this app that gives you the exact information you need to go in and introduce yourself just like you would cold calling or just like a mailer would, why wouldn't you at least, you're already there. You're literally already in front of the door. Knock on their door and introduce yourself. Say, hey, my name is is Justin I'm actually a landlord looking to buy another rental property in the area wanted to see if anyone had any interest in selling something that simple will be the

difference between someone who takes 200 doors to get a deal versus someone who takes a hundred doors to get a deal and so I I say that to say, what are your clients actually doing? How are they effectively using the app? You know, what data is in the app? How are they using it? What are they doing? What are you seeing? Yep. Yeah. So most people are actually sending direct mail that are using deal machine. The mail is actually going to show that you were in front of their house because you can take a photo of the house and that's going to show that you were in front of their house because you can take a photo of the house and that's going to show up on the front and back of the mail that you're sending yep yeah so how did that work so you're in the app and i don't want to keep doing this right so

i'm trying to avoid that i'm not tech tech savvy enough to like somehow have it on the screen you're good but so you're in the app and the app is super user friendly. Talk about like the ease of sending direct mail. Cause here's the key. I literally, I work with private clients, right? So I was literally on a, in a meeting with a private client and he was talking about through the holidays. He's like, you know, I'm kind of bored, you know, all the, and I'm like, if you're not using this and door knocking, you're missing the boat specifically because you can just send, you knock on the door, they're not home. Now you can send mail, right? So I was teaching them how to use the app, but that's the reality. Talk to people how simple that part is because to me, again, if you knock on a door and you can call

them, which there's also the skip traced phone number in there, correct? Right. That's right. And it's already there. So then you can call them and text them. Talk about the mail. I know what it is. It's a dollar per piece of mail, but like you can send mail right then and right there, one house at a time in the app. So talk a lot about, or not a lot, but tell people more about that because it's a game changer yeah so the whole reason i built the app was because i kept forgetting so i'd be right in front of a house i'd write it down and then i'd go home and i would forget to even send a piece of mail to that homeowner so this is the biggest thing that it's going to do for you is it's going to let you

follow up right then and there and all you have to do is take a photo and then it's going to know what address that was and you can press start mailers. And then you can also set it up to repeat the mail every three, four weeks. So that way you won't forget to do the follow up either. And so that's exactly how easy it is. You just take a picture, tap the house on the map, and then your mail is going to be sent. 100%. And so like, for example, right now, today's December 19th, as we're doing this recording, at 2.18pm my time, right? I have a friend who has a friend that is in a little bit of a tricky situation. And they asked me if I'd go meet with them but buying their home. I'm telling you now what I'm going to do is,

I said yes, I will go meet with them. What I am gonna go do is I'm gonna drive the neighborhood a couple times looking for dilapidated homes in combination if there are any pre-foreclosures in that area. Like I said, I don't wanna drive across the city. If there's no pre-foreclosures there, then. Like I said, I don't want to drive across the city. If there's no pre foreclosures there, then I'm going to use what David suggests. And I'm going to just go and drive

dilapidated homes, I'm going to take the app, I'm going to take a picture of the home, I will have it there to not only send them one piece of mail, or follow up three times, I then can call them after my meeting. So, I mean, even in your normal day to day, as you are just driving to a friend's house, as you are driving your family's house, as you are going to a holiday party, whatever, you can literally just be looking around for something that is maintenance deferred, use the app, ping the address. It is beyond user-friendly and you can send them mail. You could cold call them. Ideally, you door knock them, right? Again, no one loves door knocking, but I think that is the last strategy that people are willing to do. So if you have the gumption as I do, or train people to, that's where you can go from every 200 homes to every 100 homes.

Yes. And I will say door knocking is a lot more fun if you bring a buddy. Totally. I mean, it's like infinitely more fun. Totally. You make it a game, right? Like one's on one side, one's on the other side. Hey, how many people do you talk to?

It becomes a game. But even if you don't door knock, you better do door knocking. Again, you can call them and you can send mail through the app. And a lot of people, you know, come to me. And again, thank you, David, for being on. Because a lot of people come to me and say, Justin, I don't have your marketing budget to send mail. I respect that, by the way. I was broke, busted,

and disgusted when I got into this industry. If you guys remember my story, I was literally sleeping on a couch for nine months before I got my first deal because there wasn't this app called Deal Machine that you can have right on your phone. I wish there was. There wasn't, right? What are some of your clients doing? How many days does it take to get a deal? I mean, I've seen a bunch of your testimonials and it's well within nine months, let alone maybe even 90 days. Yeah. It's always like a function of how much you guys utilize it. So if you can add 200 properties in like two weeks, then I would say that you'd probably be able to get a deal within three months.

And the reason why I say that is because the guidance we always give is 200 properties, mail them three times each over the course of three months. And that is like the minimum amount of effort that you'd want to do. Sometimes it happens a lot sooner. Sometimes it might require a little bit more properties added, but basically the faster you get that number of properties in there and get the numbers working in your favor, then that's about how long you're, you're going to get a deal that much faster. Totally. And so then the next thing is, you know, the whole ability, you pull up an address and it's already skip traced right then and right there, right? Yeah. There's actually a button to get the phone number, emails, and other addresses. So basically that button is doing like a more deeper skip trace that's going to give you all that information. That's awesome. Right then and right there.

Brainy, if you're someone like myself, I call them when I'm in front of the home. I don't wait. I don't drive around. I want to be able to say, hey, you know, I'm in the neighborhood. You know, I would love to be able to meet you. If they say yes, I'm getting out of my car and I'm meeting with them. Right. Cause I want to get the deal. This is why I've shrunk in that timeframe to get a deal. Um, but what I would say to that is even if you don't have the gun, you're Nicole call, you can now use text messaging services, right? I use launch control. I love launch control. There's can now use text messaging services, right? I use launch control. I love launch control. There's a lot of text messaging services out there. But now you have the phone number to text anyways. People talk about, I don't have a big marketing budget. I

can't skip tracing cold call and blah, blah, blah. Okay, fine. Use the app. It's already done for you. And I think a lot of people you guys can hear my energy behind it you can eat because after the mastermind i realized like this is a component that i'm using that others aren't and it's primarily because they don't know how to effectively use it or maybe they don't know about it but um the ease of use is incredible, right? Like, like I said today, a friend of a friend is in a little bit of a pickle financially, they're looking to sell their home, they're back on payments. I said I would go meet with them. Well, what I will do is drive their neighborhoods and use the app, send mail and cold call, right? That's my actions today. And you all could be doing the same.

I mean, that's just the reality of it. So tell me a little bit more about what else, you know, how to use it, some best standard operating procedures, anything else you want to kind of add of the use of the actual app? 100%. So a common misconception is people don't send mail to owner occupied homes. And that's a huge mistake when you're looking at distressed homes. And I think they get that mixed up because a lot of people get the advice of like, if you're buying a list, you want to buy the absentee owner list. But if you're actually finding distressed homes, no matter what type of owner that is, it's still a, the fact that it's distressed is what makes that a good lead in it, in and of itself. So don't neglect sending mail to the owner occupied homes that you're finding that look distressed. Yeah. Listen, get, take as much time as you want. Like this is your time to shine, make it a sales pitch. I don't care. Cause I believe in this system. Um, I called you earlier and I said, listen, I don't mind if you sell this, but give my people, give my loyal followers a

hookup. Um, so we bring on a little hookup that if they do decide to buy it, they can just simply put in promo code T S O F for the science flipping flipping TSOF, but go for it because I believe in it. Like I don't allow people to sell stuff often if ever, but this is a must have like the cost of this is so nominal. So go ahead and do it as the 32nd minute long sales pitch. But again, put in the promo code TSOF for the science of flipping and you will get a discount. You're going to give them $40 off on mail, correct? Yeah, exactly. Yep. That's what the promo code gives you. Yeah. So sell people on it. Sell them the coolness.

I just think this is a game changer and people actually need it because it's very inexpensive for not only having data like the address, but then sending direct mail one by one, being able to skip trace it, having email address. This is incredible. So go for it. Yeah, absolutely. So another thing that we haven't talked about is once you've done a few deals, you can actually have somebody else drive for you. Totally. Yeah. So the app has a lot of tools to make that possible, such as route tracking. So if you're going up and down a set of streets, cause you want to cover every inch of this zip

code, the route tracking is going to make it easy to see where you missed a street. So you can go back and make sure you got that. And at the same time, if somebody else is driving for you, you can see exactly where they've been. So you not adding duplicate properties yeah you can also see exactly you know how much time they invested so if you're if you're end up gonna pay somebody to drive for you maybe twelve to fifteen dollars an hour you can actually see the hours that they've driven and the miles and the exact homes that they added as well, which is key to scaling to help keep everyone organized. There's no doubt. There's another company. It has nothing to do with yours.

Something Rabbit. Sales Rabbit. Sales Rabbit. Is that what it's called? There's a app called Sales Rabbit. Yeah. And so they can track the routes as well. I mean, this is really great, right? So if you're having this outsourced as a leader, as a manager, I want to know where my people are, what they're doing, how many doors do they really knock. The next part we didn't even talk about is like you can download the homes that you stopped by as a sheet.

So now you can then continue to send mail to them consistently, call them in Mojo. Like you now have all that data every single day and it can accumulate. And if you have a team, like I said, this isn't just for newbies. If you have a team, you can make contests out of this. You can have competitions like who's going to hit the most doors. The guy gal team that hits the most doors gets two tickets to the basketball game. Like you can leverage this as a sales tool to such a high extent. It's really kind of crazy. Right.

But then your ability to track it, how many hours were you doing it? Don't lie to me. I'm sitting here. It says one. Don't say you did it for three. Right. I see that you did 12 doors. I see your route. Like you can't lie. Right. That is huge when it comes from a position of leadership and management. Yeah. And it's great whenever you can just be in your office or be at home and see those properties rolling in. So not only that, you know, you can get a push notification when so-and-so added a property for you. If you're using the mailers through the system, you also get a push notification

when the mail is arriving because it's all actually barcode scanned and we get that information and we bring that to you in the app. So it'll say like, hey, good morning. You've got 10 mailers arriving today. So get ready in case your phone rings. So you can actually see the mail at every step of the way so that you're ready to pick up your phone. 100%. Yeah, guys, I mean, there's so much to this. I'm going to probably train heavier on it

because after coming back from the mastermind, this was a big missing component from a lot of people in the mastermind. But I also know from the questions I get, this is a missing component from the questions I get on Instagram and Facebook and through my podcast. A lot of the answers are actually in the app, right? You know, how do I find skip trace numbers? How do I send mail without having to send out 5,000 mail pieces?

All that stuff can happen within the app, right? And then you have the data. You have the ability to track routes. You ability to hire people have other people do it this is a very big missing component based around what people need in this industry and so that's why i'm such an advocate of it dude 100 that's awesome yeah you've got a lot of people in your mastermind that are successful with it too i know that because they've contacted me and they've mentioned that they're in your mastermind. That's awesome. Well, good.

Well, I mean, again, it's because I believe in what you're doing, the application. We run it. And so I talk about it. So now I just, I need to talk about it more because it's just such a useful item. I don't tend to do this, right? I don't tend to bring on sales, like buy this. No, no. Right. But this one, tell the cost, by the way. What are the costs?

It's $49 a month, and the mailers are from 49 cents to $1.50, depending on which piece you're sending. And so that $1.50 piece is actually a handwritten letter with ink. So it's a pen that's actually written on the envelope and on the inside. So that is going to take the personalization up a level so that you get more responses back. But you've got the choice to send out which mailers you want. Are there levels of membership? There are. There's a $99 one and a $299 one.

And the biggest difference- $49, $99, and $299. That's right. The biggest difference is that the $99 is really good for partners or married couples, people that have more than two full access team members. And then the $299 plan, it lets you have 300 deal finders. And it gives you the tools to recruit from like Facebook, Indeed, Craigslist, and then onboard them with a landing page and training portal to get them

adding deals to your property lists and then retain them and educate them. So you don't have to do a lot of that heavy lifting. We give you the tools to build an army of people out there driving for you. That's awesome, dude. That is huge, right? And so if you can build an army of people driving for you, you can pay them somewhat nominally, give them a commission. I mean, there's a big, big training that I probably should be doing on this, right? Because it's just more than the app. It's how do you be able to hire, recruit, retain, make them paid, keep them longer, like make more money, baby. That's what we're here to do, right? So again, I'll say it. He is allowing me to offer a discount $40 credit to your direct mail. If you just tell him where you heard about it, T S O F T S O F. He'll give you a $40 credit. Um, I had to beg and plead for that. So if you see me, give me a high five. Uh, but guys, this is the real deal, right? And again,

this is all about what I train on is all about systems, tools, processes to make your business easier, to make it bigger and to make it more lucrative. Right. And so this is one of those tools that I use that can be if used, by the way, that's the big gift, right? Like I don't sit here and guarantee results. He doesn't either, because we don't know how much you're going to use it. Are you going to use it effectively? Are you going to use it once a week or you use it every day? Are you going to do it a couple of times a day? Right? Like if you use this and you're consistent, it can give you great results, but you have to use it every day or you can do it a couple times a day right like if you use this and you're consistent it can give you great results you have to use it so you got to go out and use it again it's dealmachine.com dealmachine.com uh promo code tsof gives you a 40 off uh direct mail so percent take take us up on that dude anything else you else you want to say, man, this is, it's so

important. Like I literally think I'm going to probably do a couple of trainings with you just because guys, this, I think this is a missing piece. And you know, even if you get one more deal a month, for those of you already doing deals and your deal cost is $49 a month, plus a couple pieces of mail. I mean, even if you rounded up for $500 because you sent 400 mail pieces, whatever, your deal cost right now is not $400. This gets you there, right? So anything else you want to leave everyone with? Yeah. The reason why this is such an inexpensive method is because most people are buying lists and it's so easy to buy lists because you can go on the website, buy the list and blast out mass mail. I mean, from what I'm hearing, talking with investors

that buy lists, it typically takes a minimum of like one to 2000 properties that you send mail to at least three times when you've got a mailed list. And with deal machine, what we're seeing is it's much less, 200 properties. If you mail those three times each, that's $600. So it's a difference of like, you can be all in and get a deal of by spending like $1,000 total compared to if you're doing bulk mail, it's costing you probably minimum $3,000. So that's why you're actually saving so much money by using something like deal machine and going and finding, finding those properties and building your own lists, whether it's you or whether it's somebody else that's striving for you. That's why it's so valuable. Yeah. Well, at the end of the day, we always talk about motivated

sellers are going to be your quickest transaction, right? And part of that motivation tends to be, you know, the quality of the home, right? And if they're not keeping up maintenance on the home, they likely are in some sort of condition, it may not always just be financial, maybe there's some personal stuff going on. But those are the type of homeowners that are a lot more motivated. And if they're motivated, you can give a value to them. And if you can give a value to them, they're going to want to work with you. Well, instead of just being someone who mass blasts everything, why don't you get directed to people that you can go help? Again, if you take the mindset of I'm trying to help people and add value right and you find the

people that need your help you will be more successful you align your values with their values you will be able to do more business and do good by them right and this helps you get that direction 100 tsof that's the promo code you want to use to get the free mail. That's it, baby. TSOF. David, I appreciate it. I know you're slammed. I think there's a couple trainings we should probably do because I really know that this is a missing piece.

We're going to keep this training going. Again, TSOF, we're out of here. Thank you, the loyal Science of Flipping members. Thank you, Science of Flipping members. And thank you, Justin. I really appreciate it. You got it. Go to deal machine promo code. That's right.