Flipping Junkie Podcast with Danny Johnson

Latest Episodes:

45: [Marketing] Direct Mail Subleties w/ Ben Grise Aug 01, 2016

Show notes

Husband. Father to His Two Year old Son, Nolan!

He's a graduate of Ball State University living with my beautiful and super supportive wife in Indianapolis, Indiana. Prior to becoming a real estate professional he worked as Healthcare Technology Education Consultant at Indiana University Health. He's also a successful poker player with a few TV final tables…which I found super interesting.

He's spent the past several years learning all that he could about real estate and applying it so that he could provide enough income to support his family.

The education has paid off and he's now a full-time real estate investor in Indianapolis.

Ben started by following my Flipping Junkie blog and went on to take my wholesaling training course FreedomByFlipping (http://freedombyflipping.com).

He's grown his business and has staff helping him already. During this episode, Ben shares how he doesn't focus at all on what his letters say as he simply outsources them to Jerry Puckett who handles the list and mailing them for Ben.

During the conversation we make special note of the importance of credibility when marketing to motivated sellers through direct mail.

Ben mentions how important it is to be a member of the chamber of commerce, better business bureau and have other professional credibility and endorsements.

Testimonials are huge. Ben advises to get and show testimonials whenever possible.

He always has motivated sellers tell him they called him because of the testimonials and reviews they saw.

44: [Marketing] The Evolution of Direct Mail For Real Estate Investors w/Doug Van Soest Jul 25, 2016

Show notes

Doug was born in Colorado Springs, CO and raised in Carlsbad New Mexico. After high school he ventured west to the sunny coast of Southern California. It was there he met his beautiful bride Andrea, who happens to share his entrepreneurial spirit!

As newlyweds, they ventured back to Colorado and started Mountain High Concessions, a Kettle Corn vender for special events and sporting/concert venues. Mountain High Concessions became the first Kettle popcorn vender for the Denver Broncos at Mile High Stadium. They were itching to get back to So Cal and they sold the concessions company and got started in Real Estate!

16 years and 3 kids later, they are the proud owners of one of Southern California's largest wholesale real estate purchasing companies! They operate the business together along with our incredible team! Over the past decade he has worked as a California Certified Residential Appraiser from 2003-2010. Since 2008, he and Andrea have purchased and sold over 250 properties in Southern California and manage their in-house rental property portfolio.

In this episode, Doug shares with us how he started by sending out about 1,000 postcards each month that had the 'Urgent Notice' message on them to absentee owners. His response rate then was about 2% to 4%…which is incredible!

Too bad everyone else started doing it and now the response rates are much, much lower. Typical investor response rates on direct mail is around .5% (half a percent).

Doug is now mailing around 20,000 pieces PER MONTH! He's definitely dialed in his message and list in order to be comfortable mailing that much.

Instead of post cards, Doug now mails letters that are more professional. They have his business name and logo on them. He also includes a picture of himself and his family.

I think this is where direct mail for real estate investors is headed. Too many people are mailing yellow letters that come across as "iffy". If you get a letter in the mail from a complete stranger that says they want to buy your house and to call them…and that's all…your BS meter is probably being pegged.

Doug uses propertyradar.com for his lists. They are only available for west coast states. He used to get his lists from listsource.com (where most investors still get their lists).

His criteria for his absentee owners list is:

House older than 20 years

Bought 4+ years ago

With more than 60% equity

Less than 3,000 sqft

Many investors have trouble figuring out what benefits to motivated sellers to list in their letters. Here are some we discussed in this episode:

We buy As-Is. Make no repairs.

Fast Cash so you can Sell Quickly

Sell without dealing with Tenants or Family Members

Pay No Commissions

Skip the Hassles

Have Confidence the Deal with Close

To come up with your own benefits, just put yourself in the shoes of motivated sellers. Consider why you would seller to investor rather than the conventional way of listing with a Realtor.

Be sure to check out the show notes page at http://flippingjunkie.com/44 to download your free guide from Doug entitled, '11 Tips to Working Successfully with your Spouse'

43: [Marketing] Driving For Dollars in 2016 w/Danny Johnson Jul 18, 2016

Show notes

Danny Johnson is the host of the Flipping Junkie podcast and today he shares with us incredible tips for driving for dollars in a world where technology has made things so much easier.

In this episode, we discuss:

What driving for dollars is

When to drive for dollars

Where to drive for dollars

How to drive for dollars

What to do after you get the addresses

Common questions about driving for dollars

How to outsource driving for dollars

Check out the show notes page at http://flippingjunkie.com/43 to download a pdf of all the points talked about in this episode so that you have a roadmap for driving for dollars more efficiently.

42: [Marketing] Direct Mail on a Budget w/Justin Colby Jul 11, 2016

Show notes

Justin Colby is the Co-Founder and President of The Science of Flipping, Omni Investment Group and Phoenix Wealth Builders. The Science of Flipping is a free Podcast on itunes, Omni and PWB are both professional real estate investment companies specializing in purchase, rehab, and flipping of distressed property in the Metro Phoenix Area.

In this episode, Justin shares his story of getting started and struggling through 9 months to get his first deal. He simply didn't have any money to get started and had to door knock and do things that cost very little.

In starting out this way, Justin was forced to learn the most efficient ways to get deals. This continued as he began using direct mail to generate motivated seller leads.

He shares with us that he had just sent out 47,000 direct mail pieces. So he's grown over the years but knows what it takes to get started with very little money.

An important fact that he shares is that most direct mail response rates are below 1%. This fact tends to be ignored by most investors just starting out with direct mail to motivated sellers.

They might send out 500 mail pieces and only get 3 calls. This is very disheartening if you aren't prepared for it. This is the reason we figure more than 80 to 90% of investors discontinue or change their list after only mailing one time!

When starting to send direct mail, you want to send as many as you can afford to send at least 6 times. You've got to mail the same mailing list your postcards and/or letters at least 6 times. The reason is that studies have shown that, for direct mail in general, 80% of sales happen after 6 touches.

Don't be the guy that mails once and quits. Also, don't be the guy that mails 5 times and quits. They're almost equivalent.

The guy/gal that mails 6 or 7 times will generate a very disproportionate amount of motivated sellers leads.

Regarding whether to use postcards or letters and first class versus bulk rate or metered, it all boils down to which will be cheaper so that you can mail more pieces. When on a budget, you should always defer to what will allow you to send more.

In this episode, Justin also shares with us what he says in his postcards and letters. This is super valuable information.

We also talk about the A/B test he performed that cost him $15,000 and didn't show any measurable difference.

Listen to the show to find out what the test was so that you can benefit from his big expense and save some money for yourself.

41: [Marketing] Direct Mail Marketing For Real Estate Investors w/Joe McCall Jul 04, 2016

Show notes

Joe McCall has been investing since 2006 and has an excellent podcast called the Real Estate Investing Mastery podcast that he does with Alex Joungblood. He's doing deals in multiple markets across the us while traveling for months at a time in Europe and traveling the us in an RV. He's been teaching and coaching investing since 2011.

In this episode, Joe goes into incredible detail on how he set up and runs his direct mail marketing for motivated sellers leads.

We talk about the lists that he targets and how to get them.

He even shares when he sends postcards and when he sends letters.

A funny story during the interview was when Joe realized that he had been sending a postcard for years that he got from FlippingJunkie.com and didn't put two and two together until that moment.

Bonus: get that postcard here http://flippingjunkie.com/41

Joe focuses on absentee owner mailings using postcards. When there is a lot of competition, he focuses on high equity owner occupied houses.

He gets his list from Listsource.com using the following criteria:

Bought at least 10 years ago

At least 40% equity

At least 3 bedroom house

Owner at least 55 years old

Specific zip codes with lots of rehab activity

One way Joe finds the most sought after areas is Trulia heat maps. He targets a county and the heat map shows cheap, median and expensive houses. There is even a table of data that can be sorted to show the most popular areas.

During the conversation we shared some numbers for the typical marketing spend per deal for investors. The numbers vary between $1,000 and $3,000 per deal and go as high as $5,000 per deal for some very competitive areas.

Mailing intervals for probates should be about once per week for the first 6 weeks or so. Mailing intervals for other lists usually are spread out from 30 to 90 days in between mailings.

One recurring theme throughout the episode was the discussion of how most investors fail to answer their phones. If there is one thing you can do to eliminate 75% or more of your competition, it's answering your phone or calling back a seller IMMEDIATELY. Take that to the bank.

40: [Marketing] 11 Actionable Tips For Marketing Yourself to Find Incredible Deals w/Nick Baldo Jun 27, 2016

Show notes

Nick Baldo started investing in real estate in 2011 with a focus on flipping houses in the Buffalo, NY area. He has since expanded his business to focus on value-added rental investments. Nick created and manages the real estate educational site, Income Digs to help aspiring real estate investors get started. He has a focus on leveraging technology to create an investment business that is both efficient and scalable.

Overview of Strategy:

Tell everyone what you do
You never know where good deals can come from
The more interactions you have, the more you are working in the industry, the more that will come to you

11 Actionable Tips for getting yourself out there and finding deals

Tell your friends
1. Facebook
2. Email blast
3. Social Media bio
1. You don't have to spend thousands of dollars
2. You want people to see your brand and ask more questions
3. Simple business cards, shirt, signs
Set up brand
REI Meetings/ Investor meetups
1. Neighbors get excited about flips
2. They often have people in their lives who need to sell quickly
3. They see that flipping is not "as scary as it seems on TV"
Meet the neighbors
1. They might not know that they want to sell
Reach out to other landlords/ property managers in the areas where you have rentals
1. You should probably have one (or more) agent looking for properties for you.
2. Agents have pocket listings and access to info you don't have.
Real Estate Agents
1. Even if you're not doing the rehab, be on the job site. You want to be there if and when people come up and ask what is going on with the house.
Be Hands on
1. I personally use Podio...but if you are just starting, a simple spreadsheet will do
2. REImobile is setup with great features from the start
3. Some people like to see tangible leads.
Use sort of tracking mechanism
1. Building inspector
2. Mayor
Wholesalers
1. Attorneys
2. Accountants
3. Bankers
Professionals
1. Driving by...have a hunch about about a house? Doesn't hurt to start the conversation.
Don't be afraid to ask

"Bonus" - Even if it's not a deal you find, a solid consolation prize is finding a private lender

Visit the show notes page at http://flippingjunkie.com/40 to download Nick's 10 Tangible Tips to Find More Solid Rehab Deals

39: [Marketing] How to Determine Your Target Farm Area w/Lamar Cannon Jun 20, 2016

Show notes

Lamar Cannon is a real estate investor who loves to travel the world. He set up his business to allow him to do deals no matter where he is on the globe. His strengths are strategy, marketing and a strong mentality. He enjoys experiencing new cultures, trying new foods, reading, writing poetry and playing basketball.

In today's episode Lamar and I talk about how he goes about determining which part of a city to focus his marketing on. He's been investing in a lot of different cities outside of his home city of Austin, TX.

Investing in other cities forced him to develop a data-driven system to determine where to focus his marketing.

As a wholesaler (but almost equally as important for rehabbers), he wanted to determine which zip codes have the most action.

What he does is goes to ListSource.com and generates a list based on the following criteria:

1. Entire City (and surround areas)

2. Single-Family Houses Only

3. Last Sale Date within last 6 months

4. 99-100% Equity (shows most likely was cash buyer)

5. Absentee Owners (most likely investors bought)

6. Companies Only (filter to filter down further to make sure getting investor buys)

This is how he gets the data he wants for free…

On the last page right before checkout, you can preview your data and filter it by zip code. All he's really interested in is the count of the matching transactions so just the record count per zip code will tell him which zip codes have the most investor transactions.

How cool is that?

Another filter he uses from time to time to determine great areas for wholesaling is the foreclosure rate for the zip codes. The more foreclosures, the more likely it is that the area isn't being served well by investors as the houses aren't being bought before foreclosures are happening…LESS COMPETITION!

For someone like myself that does mostly rehabs, I wouldn't focus as much on foreclosures, rather I'd include price ranges that are near the city's media home value as that will be the where the biggest pool of buyers is.

All in all, we shared a lot of great info in this episode to help you determine where to focus your mailing and claim your target farm area.

38: [Marketing] What to Say to Motivated Sellers w/Danny Johnson Jun 13, 2016

Show notes

Melissa and I generate all of our deals almost entirely from marketing to motivated sellers. When I got my first call from my motivated seller marketing I froze….

I actually threw the phone to her for her to answer! She fumbled through it but we learned a heck of a lot from that first call.

It takes time to build up confidence when talking to motivated sellers. These 15 questions that I cover in this podcast episode will help you trim the time to develop awesome motivated seller talking to skills.

It's important to go into each phone call from a seller with these 4 goals in mind:

1. Determine if a deal is even remotely possible (focus on what is owed… not what their asking price is)

2. Determine how motivated they are

3. Build rapport

4. Schedule an appointment immediately

The 15 questions talked about the podcast episode are presented in the order they should be asked. There is a reason for their ordering.

The biggest focus is on building rapport and getting information about their situation that they wouldn't give something that is just hitting them up with questions without being conversational.

Enjoy the episode and be sure to down the PDF checklist of the 15 questions to make sure you ask them in the correct order. You can download the checklist at http://flippingjunkie.com/38

37: [Funding] Hard Money Lenders - What You Need To Know w/Chris Jameson Jun 06, 2016

Show notes

Chris Jameson started investing in the San Antonio real estate market in 2011 and soon after entered the private financing market. He has facilitated over $60M in loans and acquired over 60 units for his personal portfolio.

In this episode, Chris and I talk about the ins and outs of hard money loans and how to work with hard money lenders.

One of the biggest benefits for new investors is that hard money lenders can help keep you out of trouble. They usually won't lend if the deals isn't likely to make you money.

There are some hard money lenders that Chris calls "Loan To Own". These lenders are more interested in creating the loan with the intention of getting the house from you when you default on the loan… usually after it's already partially or mostly rehabbed!

Check out the show notes page at http://flippingjunkie.com/37 to download Chris's hard money lender checklist, hard money lending exposed pdf, repair estimates guide and his contact information.

In this episode we answer all of the following questions and more.

What exactly is a hard money lender?

Why are they better than getting traditional financing?

What characterizes a "good" hard money lender?

What is typically required from a borrower for a loan?

What kinds of deals and/or how do you analyze whether you will lend on a given deal?

What is the process from start to finish for someone wanting to get a loan for the first time?

You guys loan throughout Texas right? For people outside of Texas, how would you suggest they find a "good" lender?

Do you have any interesting stories about deals or borrowers that you wouldn't mind sharing?

36: [Funding] Joint Venturing to Fund Your Flips w/Don Costa May 30, 2016

Show notes

Don Costa, is a married father of 3 incredible kids. He has been in the real estate business for over 10 years. He started Knocking on doors and wholesaling properties, and then quickly moved to flipping houses. He took some time off during the crash and jumped back in 2012. Currently our office is on track to do a 100 flips this year. He loves what he does and he loves helping others get into the business.

Don started flipping houses when he was unemployed. The unemployment check only covered his living expenses and so he had to find a way to find deals, get funding for them and to fix them so that he could sell them and profit.

He got a notice of default list and began going door to door to try to buy houses from the people about to face foreclosure.

To buy and fix up the houses, he worked out a deal with a money partner to joint venture. The money partner would put up the funds. He would find the deals and manage the fix up and they would split the profits 50/50.

Not all deals are 50/50, we discuss some of the other terms investors use and how those are determined. Basically, the more value you bring to the table for the joint venture, the more you should make out of the deal. If you are finding incredible deals, managing the rehabs and getting them sold, shouldn't you be asking for a 60/40 split. Heck yes.

Don didn't have money to make monthly payments to hard money and private money lenders. He didn't have money to spend on rehabs before getting draws from lenders. He had to joint venture.

He still joint ventures to this day. The reason is that he always wants to do as many deals as he can. Joint venturing allows him to be able to do that.

Finding joint venture partners can be had by networking. You hear it all the time, but do you do it? That's the real question.

Don recommends using a written agreement to make sure everybody is on the same page and understands the deal. You can click here to download the agreement he uses. (Please be sure to have an attorney review this before using it - the agreement is only provided for educational purposes)

He talks about some of the situations he's encountered with different JVs. One wanted to know if paint from one job was going to another job if it wasn't all used. You probably don't want to have someone partnering with you that is concerned with such minute details.

Another thing to be careful of is partnering with someone that wants to give too much input on rehabs. You do not want to have too many chiefs trying to run things. Contractors won't know who to listen to or to check in with about change orders, etc. You should control as much as you can.

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