Flipping Junkie Podcast with Danny Johnson

Latest Episodes:

116: What is FreedomDriven? Our House Flipping Journey with Melissa Johnson Aug 27, 2018

Show notes

Listen as Danny and Melissa talk about their parent company, FreedomDriven LLC, what it entails, why they started it, and how they even got to this point in their business.

Danny and Melissa have an open and honest conversation as they talk through the journey of their house flipping business. From starting out part time and doing everything themselves, to now having a team, and providing quality tools for other real estate investors to be successful.

Danny and Melissa talk through their business journey. From first starting out part time to now having a company with multiple facets to help other real estate investors.

They talk about what the company means to them individually and how they came together to achieve the goal of helping others.

It all started driving around on evenings and weekends with the kids to find properties, Danny and Melissa remember how it all started with bandit signs and discuss their fears when starting early on and laugh through some of the early bandit sign bloopers.

Of course, after hanging the signs, the first call has to come in. They reminisce about not knowing what to do when that first call came in, Danny's phone is ringing from the bandit signs they put out, he freaked out and threw the phone at Melissa to answer. They talk about how after some time, they got pretty good…3 or 4 phone calls and knew essentially what to ask. Even they didn't know what to do when they were first starting.

Then once they got their marketing going, there is the story of signing the first contract. They remember how it took 6 or 9 months to get the first property under contract. Melissa and Danny talk about how their hands were literally shaking and how they called their mentor to get advice on what to say to even say to the Title Company.

After getting through the early learning curve of flipping came their next chapter. Moving from flipping part-time to full-time. They continued working on nights and weekends and flipped part-time for about 3 years. Danny got laid off from his job (what he attributes is the kick in the butt to start flipping full time) and Melissa stayed on full-time at her job for about 6 months before she joined Danny full time.

The next milestone was figuring out how to flip full time being that the business was still just Melissa + Danny at this point. They talk about how they started to systematize the business a little bit with the additional time they had to focus on their business instead of their day jobs. In 2008, during the housing crisis they stayed determined together that they were going to be successful and not go back to full-time day jobs.

Ultimately, they trusted each other and their vision and go through the storm that was the housing crisis of 2008. Fast forward to 2010, their business made it through the housing crisis. In 2010, their family took a three week vacation on the west coast. Part of the trip, Mcminnville, Oregon to see an old wooden plane, it was here on this trip that Danny decided when they got back to San Antonio that he was going to get his pilot's license and chase his passion.

Slowed down on the house flipping business to focus on Danny's passion which offered them a hard lesson to learn. Most of the deals you are doing now, come from your marketing from 3-4 months prior. They were at the end of their lead pool and hadn't spent the time over the last few months marketing the business.

Back to square one, with no leads built up in the pipeline. They started the FlippingJunkie blog to support the process and creative energy Danny needed to jumpstart hitting the pavement again for leads. Little did they know this would serve as a platform for their creative outlet as well as creating a community for people looking to learn more and grow their own businesses.

Danny blogged for 34-weeks, showing everything they did, marketing, analysis, everything behind the scenes of rebuilding their pipeline. Showed people how to get the deals and how to profit from them. Danny later turned these blog posts into his best-selling book "Flipping Houses Exposed."

Just recently published the book in print, should be available for purchase soon. It's always been available digitally but now it's a physical copy. www.flippingjunkie.com/book

Danny and Melissa wanted to help people have something that can help fill more of the gaps when starting your house flipping business, wanted to help people get into flipping. Most people mentioned a lack of capital starting so they started developing Freedom by Flipping, a Wholesaling course for people starting out without the capital.

Danny talks about his software background before he started house flipping and how he had naturally made systems for their own business to be successful. It was at this point in 2013, when Danny and Melissa got serious about creating REImobile (a CRM system for real estate investors) to help other investors outside of their own business.

A conversation with Brandon Turner from BiggerPockets helped Danny realize how most of their deals come from online and how many investors don't have a tool to help them build their own online presence. This conversation lead to LeadPropeller being born and launching in 2014. LeadPropeller is a way for investors to have a website built for them that is mobile-friend, SEO-optimized, without needing any coding skills or developers. Piggybacking off of Danny and Melissa's experience.

Danny and Melissa learned by experience that first contact usually gets the deal so they added text capabilities for every lead that comes in, plus other features like automated follow ups, etc.

At this point, Danny and Melissa were still doing everything themselves. Right before launching LeadPropeller, they realized they needed help and hired their first employee.

Danny and Melissa met Justin Williams around 2014, he was a master delegator and team builder. Danny visited him in California to see how he had his team structured and how he was able to not be involved in every bit of the day to day.

After this meeting, they started hiring people to help with the day to day operations, starting with an Acquisitions Manager to take some of that weight off Danny so he could keep developing the software side of the company. Melissa also stepped in to be more involved to offer Danny more time on the software side.

May 2015, REImobile finally launched.

In October 2015 Danny and Melissa started the FlippingJunkie Podcast. Loved the idea of interviewing other real estate investors rather than just having the singular perspective on the blog.

In November 2015, they started doing more with LeadPropeller. Started managed online lead generation with LeadPropeller Services (Fuel). Started with Josh managing the internal SEO, lead generation, AdWords, Facebook, PPC for Danny and Melissa's business. Now taking the knowledge gained from internal promotion to offer to other investors. Because of demand the company only takes on a certain number of investors in any given area, that's why there's a need to check availability.

In October 2016 they got serious about building the house flipping team. They both joined Justin William's master mind group to continue to grow their business with motivation and like-minded investors…Melissa had an idea after their first experience, to split the company into two focuses. Danny would focus on the software side and Melissa would focus on the house flipping side of the company so they could both grow.

They learned that building a team is more than just hiring a team, it's what are you doing it for and really building the right company culture as well. Melissa has kept the flipping business up and running if not more successfully now that that's her sole focus.

Fast forward to 2017, most leads for the company are coming from online, they had LeadPropeller sites but were missing comprehensive blueprint to build the lead generation machine for online lead generation. Danny spent his time creating this blueprint, Danny put together outlines and scripts and eventually recorded over 16 hours of video training called Seller Lead Hacks.

After the road map was done, Danny started working on the updated software to replace REImobile. It's called FlipPilot and it's so much more than a CRM, it includes automation, call management, task management and KPI dashboards to name a few.

Danny and Melissa created FreedomDriven to help busy real estate investors achieve true freedom by building businesses that run without them. FreedomDriven is the parent company that includes subsidiaries: FlippingJunkie (Podcast), LeadPropeller (Sites + Lead Generation Services), SellerLeadHacks (Digital Marketing Training) and FlipPilot (REI Business Management Software).

115: [TEAM] Building a Team with Don Costa Aug 20, 2018

Show notes

In this episode, Danny sits down with Don Costa from the Flip Talk podcast to discuss how he has built a successful team that is flipping over 200 properties per year. We will walk through the ups and downs and lessons learned along the way to building the right team, the training that goes into making that team successful, and ultimately how to trust them to make their own decisions and go their own way in their positions.

Don Costa is a married father of three incredible kids and has the popular podcast Flip Talk. He has been in the real estate business since 2003. He started by knocking on doors and wholesaling properties, and then quickly moved into flipping houses. Fast forward to 2018, and Don has built a successful flipping business that will flip over 200 properties this year. Today, we go in depth on how Don built his team effectively and what lessons he learned along the way.

Don talks about starting out as an investor and trying to grow the business and realizing that he was the bottle neck. Trying to do too many things himself and not necessarily trusting the employees he had around him. It didn't take long to realize this model wasn't going to work.

Don talks about rebuilding his business in 2012, he still had a lot of the tendencies to control everything but this time around he had learned the lesson to release some control.

Danny and Don talk about how as entrepreneurs it's easy to be a "control freak" and to think your way is the only way. They talk about how they still catch themselves in old habits of not wanting to give up control even though they know better. It's something you have to work on daily.

Danny asks, "At what point did you decide to start building a team?"

Don's answer? Right out of the gate on the second go around, he used the mantra "hire for where you want to be." A good friend asked how he could be involved and Don knew he needed a property manager so he was his first hire.

After the first hire, he reached out to a "broker" and asked him to come join their endeavor and he decided to come on board.

Don remembers how it was just the three of them for about a year and half or two years and how they sat on the floor in the office they still have today to put the furniture together.

Building a team definitely didn't happen overnight, and it wasn't perfect, Don remembers.

Don talks about having his a-ha moment on an afternoon when he was spread too thin. He was supposed to be at school to pick up his son and was also supposed to be at a property to pick out paint color and so he thought "it's time to get out of the way and let them make mistakes, it's okay they'll learn from it - I make mistakes every day."

Letting your team make mistakes is one of the hardest things that Don has had to do.

Danny asks if there's a good way to transition your knowledge into new team members. Don mentions that a lot of times hiring managers and business owners make the mistake of not spending enough time with their new hires. According to Don, this is on the key components of building a successful team.

He says, when you're hiring someone you can't just dump the entire job on them or they'll be overwhelmed and potentially not stay on with your organization. Don recommends to give new employees a piece of the puzzle, educate them on how the process works and advise them to come back when they have time available. This ensures they learn the process and are able to execute to the right standards and build their knowledge and skill set strategically.

Don mentions how when hiring you want "plug and play" someone to just step into the role and start running but really that's one of the worst things you can do for your organization because you won't have stability. Taking time to train is key.

Want teachable and coachable employees, to put this into action Don is looking to hire an Admin Assistant to develop into a TC, give me a blank slate and let me build upon it. All of our best employees have been the "blank slate" who are teachable and coachable and who have good attitudes.

Danny asks if Don has any specific interview questions to help him find the right people. Don mentions specifically asking what motivates them and to really get to know them.

Danny talks about a new strategy at FreedomDriven LLC where they are doing group interviews of three people. They talk through the strategy and experience and how it's been a really great strategy for the company.

Don talks through his vision of the company and then strategically planning how to get there. He knew he wanted to be a 100+ flip company and that kind of set the tone for hiring and what that meant to the bottom line. Being able to paint the picture of the vision is what helped him hire when the company was young.

Don mentions looking outside the books and finding strategic ways to get what you need, from hiring part-time employees to looking at people with skill-sets that fit a job rather than looking for someone with specific experience for a job.

Danny mentions if there's not a mission or a goal for what you're doing how can anyone, including your employees be excited about it? He recommends to include language around your mission and vision on job descriptions so people can connect with the bigger picture and who are truly passionate for the vision and not just the work.

Danny and Don talk about what it really means to "trust your gut" and how that plays into the team. Don reflects on how the instincts come from making mistakes and learning and if you want your team to have that instinct as well they will have to learn from mistakes and making their own judgement calls. It's not something you're born with.

Danny asks, "How do you monitor the progress of your team and the success of your team?"

Don offers several examples of how this works in his organization and how to use mistakes as teachable moments so the employees grow and learn how to more forward successfully.

Don talks about how they fine tune their internal systems to be more successful. He mentions 40% of the contracts they've received this year has come from follow ups so this is an extremely important part of the business model. He monitors stats and looks at the big picture to focus on the right areas to grow the business efficiently.

Danny and Don talk about how sometimes focusing on getting new leads is the easy narrative and something all businesses get caught up in. Don speaks more to the fact that 40% of their deals this year have been through follow ups. Don mentions that 50% of their appointments now are from follow up contact with leads and that this is currently the best converting audience he has.

Danny talks to Don about the automated follow up functionality in the upcoming software launch of FlipPilot, Don will be beta testing the software starting next week.

Don talks about changing his business model over the last year to really focus on the follow up. He speaks to the fact that his business has close to doubled because of their effort on follow ups. They talk about the right technology to support your team and your operations.

Don concludes with how important communication is and how important leading the team towards a vision as the owner is extremely important. Don meets with him team informally each week to make sure they are all on the same page.

114: [FUNDING] Buying With 0% Financing with Matt Recore Jul 02, 2018

Show notes

Matt Recore first started working in the tech industry but realized it wasn't his calling. He then began inviting in the pre-foreclosure world, focusing on houses that were on the way to auction. Matt would negotiate deals with sellers just before they would bring their houses to foreclosure auctions. "It's not a great way to get into buying houses because of how stressful and emotional it is for the seller," Matt says, "but you have to really put a lot of trust and look out for people in those situations. It was challenging, but that's how I learned."

The market began really heating up in California in the early 2000's. This made Matt nervous. He sold all of his rentals and stopped flipping to try and avoid the crash that he felt was coming up. Matt got back into tech and had gotten out of the real estate industry just before the deep decline in California. "The peak season for us was in 2005," Matt says, "But I got back into real estate in 2012."

Once Matt got back into full time investing when the market began to get back to a safe place, Matt started building a strategy that was safer for the future. He wrote a book titled "How to Purchase Real Estate at 0% Interest" (the link is in the link section below). This book was written before the housing market crash with a strategy that's been working for him. Let's talk about what the strategy is!

There are benefits on both ends. Buying at 0% interest means that every bit being paid is going toward the principal which means you're building your net worth a lot faster than a normal 30-year mortgage loan. A 15-year loan is much better because you begin to see the principal paid out sooner. Basically, your net worth is going to be much better when you buy this way.

The benefits to the seller are avoiding capital gains taxes. In California, the capital gains tax includes a state tax. When you sell with an installment sale, you can completely avoid paying those taxes. "It's amazing how many sellers don't want to pay the IRS," Matt remarks, "The 1031 strategy is great, but you have to find another property that way. With an installment sale you can skip all of that."

There are a lot more details about the strategy that Matt's been working on in his book. The link is in the link section below. Check it out so that you can start buying houses with a 0% interest rate too!

113: [BOOKS] Books Worth Reading with Brandon Turner Jun 18, 2018

Show notes

Brandon Turner is the janitor at BiggerPockets.com, stumbling around in the dark looking for stuff to clean up. He also writes books. And he's a slumlord. Jokes aside, this episode goes over the books that all real estate investors should be reading as well as Brandon's adventures in mobile home park investing.

Today's book is "High Performance Habits" by Brendon Burchard. Brandon has been devouring this book and talking about it every chance he gets. This book isn't specifically a real estate investing book, however it covers topics that are applicable to real estate investors such as staying on track with your business.

"Most books tell you 'hey you're a moron, do these things' but what I like about this book," Brandon tells, "is that it tells you you're already doing well, here's how to make it work for the long haul."

One of the biggest risks with real estate investing is how volatile the market can be. While it's been a good 5 or 6 years for real estate so far, what would happen if there was another housing crisis? How would your business be able to handle that? That's where the lessons in this book come in. Knowing how to build a long-term successful plan for your real estate investing business will keep you on top, even if the worst should happen again.

"When things are going good we tend to ease off the gas a little bit," Brandon says, "That's when people get burnt out and quit. This book shows those high performers who maintain that status for years and what they do differently."

There are six things that Burchard identifies in the book that will keep your business successful; threes personal habits and three social habits. They are…

High Performing People Seek Clarity (they know what they want)
- High performing people are looking for the clarity of what they want. The problem with a lot of people's mindsets is that they either don't know what they want in life, or are too vague about it. "I want to be rich." Ok, how rich? How do you want to go about doing that? What will you do once you're rich? There are too many variables. Being clear on your goals and what you want to achieve will keep you focused in your efforts to do so.
- Not just to be an energetic force, but to make sure you're energizing yourself the right way. A lot of people get slowed down by the food they eat without even knowing it. Making sure you're body and mind are healthy first will give you the energy you need to accomplish your goals.
Have energy
- If you don't have a need to do something then you probably won't get around to it. You have to want it, but you have to need it, too. Brandon tells us the story of when he was first married and working in a minimum wage job. His wife had to drive with her head out of the window in the cold because they didn't have the money for a new car. That was the moment he knew that investing in real estate wasn't an option, it was a necessity for his family.
Raise Necessity
- "This one's kind of obvious, so I won't spend much time talking about it," Brandon jokes.
Increase Productivity
- Everything you want in life, you have to get from other people. You need to know how to work with people and be around them in every capacity. When you're working on a deal you're never alone in the process. You have to talk to the sellers, the buyers, the title companies, the contractors, your own team, lawyers, and so on. Because you have to work with so many other people, you need to create an influence in that sphere. Let them know that you're a good investor to work with and foster that business dependency.
Develop Influence
- High performing people are bold and chance takers. The more confidence you show in your real estate investing business, the more people are going to want to work with you and be around you. If you're taking calculated risks, then you're pushing your business onto the next level.
Demonstrate Courage

What books are you reading? What books do you suggest? Let us know in the comments! And don't forget to check out the BiggerPockets Podcast and website to learn from more active real estate investors!

112: [LAND] Land Flipping with Seth Williams May 29, 2018

Show notes

Seth Williams is a land investor and residential landlord, with nearly a decade of experience in the commercial real estate banking industry. He is also the Founder of REtipster.com - a real estate investing blog that offers real world guidance for part-time real estate investors.

Seth got started in land investing in 2005 while he was in college. He had first learned about real estate investing from the book Rich Dad Poor Dad. "I was fascinated by the book," Seth tells, "It totally changed my perspective on a lot of things."

The book wasn't specific about how to get into real estate, though, so Seth dug into the MLS to find houses to flip or rent. He learned how to calculate the numbers to figure out what a good deal was, but then the housing market crisis hit. In 2007 he couldn't find anything that made sense for him to make a profit with.

Because the market was so hostile and Seth was a beginning investor, he went into the work force after college. In 2008 he took a course in land investing where he got the information he was looking for. With that course Seth began finding motivated sellers by using delinquent tax lists. Land was a more simple type of real estate for him to get into with a much lower risk than house flipping. Seth found that you could buy land from people on the delinquent tax lists for pocket change.

"I could buy these plots free and clear with the money I had in my pocket," Seth says, "When I realized you could do that I was like 'Whoa, this is a game changer'!"

Without needing to deal with loans or mortgages, Seth was able to build a safe foundation for his land flipping business. House flipping takes time to learn the safe way to invest. For someone who's been in the industry for a while, it's not as risky for them to invest in houses because they know what they're doing. When Seth was was just starting out, he knew nothing about how to safely invest in houses, which is why land investing was so appealing to him.

"With land, I could set myself up with these deals," Seth explains, "and no matter how the cards fell I would make money from it."

For example, if you buy a plot of land that's worth $5,000 and you're only paying $500 for it, it's a no-brainer that you're going to make a profit when you sell it in return. Because this made so much sense to Seth, he started looking at counties that weren't densely populated and buy land there.

There are three counties in Detroit that are very densely populated, which makes those plots not desirable. The problem with buying land "in the armpit of town", the only use for it is to build another house. It has less market appeal. On the other hand, land near those densely populated counties has more potential, which is what makes that land a better investment.

111: [MARKETING] How Kyle Found Success with Kyle Burnett May 14, 2018

Show notes

Husband and father to a 4 month old baby. I started investing about a year and a half ago. Ended up with a loss of $700 for 2017 but the first half of 2018 we will gross over $125,000 with a goal of $250k for the year.

Kyle started out in real estate investing just like most investors do. He was unhappy at his desk job and wanted a way to achieve financial freedom. There were some learning curves he had to overcome, though. When he and his wife got married they used the money from the condo she sold to buy their first house to flip. Unfortunately Kyle ended up losing money in that investment.

One of the biggest learning moments in that first house was figuring out how to manage contractors the right way. Kyle found that the contractors weren't showing up to the property frequently, they were taking other jobs while still working for him, and were spending too much money on supplies from hardware stores. "That was a learning experience," Kyle says, "Now I check in with my contractors every day to make sure everything is going smoothly."

Luckily for Kyle he had another property already being worked on by the time the first house was sold. This property went smoother, getting him a decent profit. "You have to stumble a few times before you get the hang of it," Kyle admits. That's so true. Starting your own real estate investing business is a learning experience.

Once the first two properties were done with Kyle started getting in the groove with his business. As far as marketing goes, Kyle has been doing direct mail and managing leads on his website. He has his phone number on the postcards he sends with a call to action to text him if they're interested. "I haven't gotten too many texts," Kyle admits, "but a lot of people go to my website from the postcard."

A mixture of direct mail marketing and having a websites for people to go to has been working really well for Kyle. "I think it's from people not wanting to make a call, but feeling a lot more comfortable filling out a form online," he tells. To be honest, that's what we've found works best too. There are so many motivated sellers who get nervous about talking to someone asking to buy their house. The detachment of filling out a form online is more comforting for them.

So what made Kyle get into real estate investing? Well, the condo his wife sold when they got married gave the couple roughly $20k. Initially Kyle wasn't planning on getting into real estate investing. In fact, it all started with a Google search for what to do to invest the money. "I knew I didn't want to spend it or just put it in retirement," he says, "Honestly I just Googled 'ways to invest' or something like that and real estate kept coming up."

Kyle knew he didn't want to build a renting portfolio. "Flipping was more appealing to me. I didn't like how long you have to commit to renting," Kyle says, "I didn't start with Rich Dad Poor Dad or anything. I just searched in Google and did research there."

It just goes to show important it is to appear online. If you want to get in contact with Kyle you can reach him on his website or email him at kburnett@ibuyhouses513.com.

110: [GROWTH] Flipping and Growing Cannabis with Alex Wentland and Jason Rios May 07, 2018

Show notes

Jason Rios has spent about 30 years of his life in Las Vegas and entered the real estate industry there over a decade ago after graduating cum laude from Pepperdine University with a degree in Business Administration. He started out as a traditional Realtor before transitioning into the investing side several years back.

Mr. Rios is familiar with a wide array of investing strategies and enjoys utilizing his entrepreneurial skills along with Alex to help expand their investments. His goal by 2020 is $100,000/month in passive income. In his spare time, Jason enjoys time with his loved ones, attending sports games & concerts, traveling, thrill-seeking, playing softball and giving back as president of his local alumni chapter.

Alex Wentland was born and raised in Chicago,IL and has been living in Las Vegas for 3 years. Prior to getting into real estate he went to a community college and was planning to work in the medical imaging field. He was waiting tables for the last 7 years and finally decided to pursue an entrepreneurial path after reading an impactful book despite most people's opposing opinions. He chose real estate as it seemed like the most traveled path to financial success.

Alex's goal by 2020 is also $100K/month in passive income and to become a millionaire by age 30 with the help and teamwork with his partner Jason. Alex loves spending time with his fiancée and 2 dogs, taking hikes, going to movies, sporting games and traveling.

Their dissimilar paths brought them to the same REI circles, leading to a partnership in 2016 that started as wholesaling and has evolved into a multi-faceted investing approach. Their first deal together closed in 2017 and has since led to over 100 completed transactions. Alex and Jason feel this is truly just the start of what they will accomplish together.

109: [Mindset] Avoiding The Decline Apr 23, 2018

Show notes

Danny was casually watching YouTube and found a video of the growth and collapse of civilizations in Europe. What he found especially interesting was the huge expanse of the Roman Empire and its eventual decline. Similarly, Dan Sullivan's program called "Pure Genius" talks about self improvement and growth. In the last CD, Sullivan talked about how great civilizations started on top of the world but still fell apart. Why is that?

Sullivan puts it like this: take something like the Roman Empire and and scale it down to you and your business. When an individual is at the top of their game at some point, inevitably, something is going to happen that makes you take a tumble. Whether this tumble will cause a downward spiral or not is entirely up to how you manage the situation. Sullivan says, "Progress stops when people stop being grateful. People come to a point when there's so much success that they start losing touch with what got them there."

That's such an important lesson for anyone, let alone a real estate investor. When you're so used to looking far in the future and achieving huge goals that you're not noticing what you've accomplished, you're going to start getting overwhelmed and fall apart. Celebrate your wins more! After you close a deal, celebrate it. After you covert a lead, celebrate it! Take a second to see how hard you worked to get to this point. Look at all of the effort you put into a deal that you profited off of. See how far you've come and know that it took you time and effort to do it. You didn't get where you are now overnight.

The most important thing to keep in mine is that you're doing well. You have a successful business that you built. Don't always look so far ahead that you lose sight of where you came from. You did it, and you're going to keep on doing it.

What's your best win? Let us know in the comments, or in the Flip Pilot group on Facebook! Join for free by following the link in the section below :)

108: [Mindset] Overwhelmed? Stop Dreaming Apr 16, 2018

Show notes

Learn how to get unstuck. Move from dreams, ideas, hopes to fulfillment and action.

107: [Marketing] Direct Mail Is Dead? with Melissa Johnson Apr 09, 2018

Show notes

Melissa Johnson has been on the Flipping Junkie Podcast multiple times (she and Danny run the business together and are married, so it goes without saying she's an important member of the REI community). She runs the house flipping side of their business and does a great job doing it!

After years of running their real estate investing business, Melissa made the decision to cut out direct mail marketing at the start of 2018. Their yearly goal was to stop direct mail marketing all together. But why?? Hasn't direct mail been working for so many investors?

The truth is…direct mail is dead. Real estate investing direct mail marketing has been declining for years, so much so that Melissa said it's time to stop. In it's place, Danny and Melissa are going to be focusing on online lead generation.

Melissa didn't make the decision to cut out direct mail overnight, though. At the beginning of 2017 she had noticed that their direct mail wasn't consistent and wasn't performing well. Instead of cutting it off then, she decided to go all in and get that marketing strategy back up and running.

"We started a bunch of mailing campaigns and the year went on, and we were getting some deals, but it wasn't performing the way I hoped it would when I looked at what we were spending on it," Melissa tells. "I started looking at the numbers half way through the year and was pretty disappointed."

Melissa's direct mail plan started by mailing to high equity for most of the year, then they started adding in unknown equity. The unknown equity didn't produce any leads at all, so they quickly stopped that campaign.

"We had about 30k addresses in our mailing list, based on our criteria," Melissa explains, "We were had them separated by zip codes so that it wouldn't be so much at one time. Every mailing was between $2400 - $2500 per week."

The criteria for the high equity lists was anything under $250k with more than 50% equity, at people over age 40. The criteria for the unknown equity lists was just not stated how much equity the homeowners had. The equity could be unknown, unstated, they could have some, they could have none; it just means that the equity field wasn't filled in. This list did not produce leads, so Melissa stopped that campaign.

"About half way through the year I took a look at the numbers," Melissa says, "In September I said 'look we've been spending a lot of money on this and it's not getting us leads. We need to stop what we're doing and reevaluate all of it'."

The mailing lists were the same addresses, but it was all sent in a cycle. Each address would get a piece of mail from them every 4 - 6 weeks. With 30,000 addresses, that adds up.

Once Melissa looked deeper into the process and the direct mail findings, she learned that direct mail just isn't enough to keep a business at this scale going. There's a huge difference between a high quality lead and just another throw-away lead.

Melissa sat down and took about 8 hours just looking over every single lead from 2017 to see which ones were high quality and which ones weren't. She read all of the notes on every property to see where that lead went, how far it got, and if it turned into a deal or not. And if it did turn into a deal, how profitable was the deal?

Overall, Melissa found that the cost of direct mail wasn't worth the kinds of leads that they were getting. Their higher quality leads were coming from online marketing strategies and their website. The leads that came in through direct mail either weren't quality leads or weren't leads that converted to deals.

So when the question is asked: is direct mail dead? Melissa's answer is, "For us, direct mail died about a year ago. We dropped it and moved to online lead generation."

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