The CEO of REIvault, Gary Boomershine, joined us today to share his expertise on building a lead generation for real estate investors, to tell you how to improve your own leads, and to talk about direct mailing, follow-ups, and other strategies that will get you more deals. Learn what key money-making activity is, how to do marketing if you are on a small budget, and how Gary’s million dollar follow-up letter got him the house he really wanted.
What You Will Learn About Lead Generation for Real Estate Investors – Gary Boomershine (Interview):
- Why Gary Boomershine hated real estate and how he decided to become an investor
- How he started REIvault and what they do for their clients
- The key marketing activity that makes you money
- Why mail lists are not equal and how they differ
- What strategy Gary uses to generate his lists
- How postcards turn into leads and why it is important to use the right ones
- The reason why many fail to find and close the deal and what the remedy is
- The advice for entrepreneurs with a small marketing budget
- Gary’s million dollar follow-up letter
- Why people sell their properties at the high price
- Why you should be calling potential sellers and how those activities are organized in Gary’s company
- Find out more about the services offered at REIvault
- To learn more about lead generations, listen to Gary’s podcast
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Speaker 1: This is Theriault Media.
Gary Boomershine: [Chris Chico 00:00:05], here’s a perfect example. Chris Chico, this is years ago, he got a Discover card in the mail and went for $10,000. Innately, he loves sharing this story. He had $10,000 available on the credit card. It’s like he’s credit actually wasn’t all that great at the time. He used all the $10,000 to mail and made 100 grand. By the way, he’s made millions of dollars since then.
Matt Theriault: Right.
Gary: He would have never done it if he didn’t spend the money on marketing. Marketing is a return on investment. Most markets, $1,500 to $2,500 in marketing spend on average across the country should result enough leads to convert into a deal if you’re talking to the seller.
Matt: Hey. Matt Theriault here at Epic Real Estate, got a really high show for you today on the Thought Leader, Thursday, we’re going to talk about everything that’s going on in the world right now around lead generation and what you could do about it and generate more lead for yourselves, so stay tune. All right, so today, I’m joined by a good friend of mine, a long time and fellow real estate investor, we run a lot in the same circles.
He’s got a great service around lead generation. I just thought what better person to have on to really dig in and he’s really got his finger on the pulse I guess or the thumb the finger, the thumb, thumb of the finger on the pulse of what’s going on in lead generation particularly when it comes around direct mail and follow up and the technology that’s involved. Yeah, we recorded this episode probably a year ago or so.
We did such an amazing interview and I couldn’t wait to share it. I lost the zoom file of the screenful that we did. We’re going to try and recreate that magic. We’re going to go a little bit more deeper, so I’m going to talk a little bit more about what you can actually do yourself and emphasize or improve your own lead generation or maybe at the end, you just want to have Gary do it all for you. There’s everything in between.
All right, so please help me welcome to the show, Mr. Gary Boomershine. Gary, welcome to Epic Real Estate Investing.
Gary: Man, this is awesome, Matt. I know that when I found out that you lost that video, it was like, “We went so deep.”
Gary: I’m excited to be able to have us do this again. I’ll work to deliver some great value for your loyal followers.
Matt: Super. Yeah and it’s been a year. I know a lot of it is going on in your world, so just bring me up to speed, I guess give the cliff notes version of your background and what you’ve been doing in the last 12 months.
Gary: Awesome. Yeah, I’ll keep it short on my background. My name is Gary Boomershine. I am in California. I’m about 45 minutes from San Francisco. I got labeled as one of the OGs, one of the old timers, they call that the original gangster. That term, you and I when we were in Tampa with gosh [crosstalk 00:02:48].
Matt: When I see you, that’s the first thing I think of, a gangster.
Gary: I’ve been around. I’ve been actually real estates since 1987. I was a licensed agent. We had a family brokerage. I was one of those of stories where we’re forced to get in the business. I hated it actually but I paid for college by holding open houses, door knocking, cold calling, and finding listings, and then fixing up our rental properties. I hated it. I told my dad I didn’t want to have anything to do with the real estate.
I went and I got a computer engineering degree, so I’m a tech geek. I got picked up by one of the biggest consulting firms and I did four high tech Silicon Valley startups back in the whole .com days. It was great, man, 90 hour work weeks travelling all over the world, never actually seeing the sunlight because you’re working all those hours. It was finally in 2004 my wife and I, we basically had enough. I read Rich Dad Poor Dad.
I got excited about the concept of passive income. We were going to start buying apartments. I unlike and I recommend against this for everybody but my wife and I actually, we had a two month old daughter, we had a four year old daughter, we had a $700,000 mortgage. My wife left her Robert Mondavi brand manager job and I left the six figure sales job and in the Valley to go do real estate, right?
I’ll tell you, this has been an incredible journey. I’ve been doing it. I currently I’m in four markets. I’m a lender. I do a ton of private lending. I do whole selling and I pick up some creative deals and I do some partnership deals and it’s awesome. I think the main thing that’s interesting in this business, all the money is made when you’re talking and making offers to sellers. It’s not when you’re doing… Education’s great, masterminds are incredible but really, you’re not going to make money and move the market and change our life until you’re actually making offers and getting those deals.
I recognized that especially with my background. I started a company. It was actually around direct mail. You are there. That was actually we are all at the mastermind collective genius.
Gary: There were 110 of us, right talking about Podio, talking about direct mail. We’re sharing the right postcard. Chris Chico and Chris Richter had this amazing mailing list. [Joe McKal 00:05:09] had Podio, right?
Gary: I’m like, “Guys, we’re real estate people. Why don’t we have just one team? Let’s have one team that we share and get massive leverage.” I built that. It’s called the REI Vault. We’ve done over 30 million pieces of direct mail. I know that we’re the largest marketer for real estate, in the real estate niche. We actually added an outbound phone team. We do cold calling and skip tracing for our group. The last month, I actually just pulled up the numbers.
It was 314,000 outbound phone calls and I got all the metrics. We know what works. I love sharing it for your listeners. I’ll provide on what we’re seeing in terms of what’s working. If they want to take some practical and tactical capabilities, they can implement themselves off of this or join us and you can actually tap into our group. We have over 250 super experienced real estate investors and agents using our service.
It’s like for the cost of one resources, so less than $10 an hour, you can have our team of experts not only do all the marketing for you and direct mail and pulling all the right magical list but also the phone work so they can do all the text messages, the ringless voice mail, and cold calling to schedule appointments. That’s new. Actually since our last trip, I actually built that this last year.
Matt: It sounds new. Perfect. Okay, good. Let’s break it down from beginning to end and then we can do a demonstration of how all of that stuff that we’re going to talk about can all be just done for you.
Gary: This market right now is about finding off market deals. There’s on market which is typically MLS, bank owned, foreclosures and HUD properties. That’s all the dried up for the most part around the country. We have to go direct to the seller. To go direct to the seller, there’re some moving parts and you have to get all of them right especially in this market. A lot of people right now are doing direct mail.
They say, “The lead suck. The sellers aren’t motivated.” It’s like if you drill in, they’re missing the phone piece or the text messaging. There’s a funnel and all of these things have to be done. I’m going to walk through on the left side. Every one of these has to be done right, right really to make the money and some of these tasks or areas are like $5 to $10 an hour of work. Some of them are a hundred or a thousand to $10,000 an hour, right?
As a real estate business owner, each of us, all of us on this call, on this show today really should be doing the money making activities, the thousand to $10,000 an hour work which is negotiating with sellers, making offers, right, negotiating on price and terms, raising money, growing their team, et cetera, not like licking postcards and talking to a mail house and dealing with spreadsheets. I’m going to walk through this and then I’ll show you where REI Vault fits in because we pretty much do all of that for $10 an hour.
I think we do it better. It’s like the perfect unicorn, the unicorn VA. Everybody says, “If I just hire somebody in the Philippines, yeah you got to train them, you got to manage them, you got to keep them busy.” It starts with marketing. Marketing, there’s multiple channels and right now and you know this, I know you preach this, this is in all the masterminds I’m in, everybody that’s really making the money to seven and eight figures, they’re doing two things really well.
Direct mail, so they’re sending out effective, not just direct mail, direct response marketing, direct mail marketing and cold calling. The reason cold calling is an example, it’s like, “Man, that’s old school,” but very few people are doing it. When it’s harder to do and get right, and so you got to do marketing, that’s direct mail. Maybe it’s pay per click, Facebook, right? Then there’s the fulfillment of it.
You got to pick the mail house. You got to find the right mailing list. What I’m hearing from around the country is the two best mailing list, Chris Richter and ours, REI Vault. I think the way we’re able to get the data is very difficult for others. You got to do the weekly drops. Every single week whether it’s a Thursday and by the way, the best day of the week to mail what we have found is Thursday.
Dropping mail on Thursday is going to get you the highest number of responses. The reason we found that is that most of the sellers are calling on Tuesday or Wednesday the following week. They’re not calling as often on the weekend. The third is then you got to have… when you’re receiving the leads, you need a system. It’s actually multiple systems. A lot of us like Podio, it could be InvestorFuse.
There’s FreedomSoft. Some people have their own homegrown but it’s basically a place to capture the leads. Capturing them in email is ineffective. You need a phone system like CallRail. You need to have a ringless voice mail like Slybroadcast and text messages, we actually like Twilio. Somebody needs to actually talk to the seller and answer those live calls, right and inbounds phone team.
Most of the calls come between five and 9pm at night. That also means somebody has to answer those calls live. That is the people that are doing that are making a lot more money versus taking them to voicemail, all right? Then there’re some research before getting on the phone with the seller, typically having some research done like pulling the property reports and the comparables and knowing what the value in the rent is before you talk to the seller.
Somebody needs to have that personal dialogue. Then there’s the outbound phone team because a lot of these calls come in, right? Then there’s actually talking to the seller, asking the questions like how long have they own the property and how’s the condition, is it currently rented, et cetera with the right script. All of this stuff has to be done and then also the follow up. The key to making money off of marketing is on the follow up.
Typically, text messages, ringless voicemails, emails, and direct phone calls at the right time with the right script. The problem is usually, a lot of people gets stuck in the mac during quicksand because they’re trying to do all of these themselves. I found this and this is exactly why I built REI Vault. We have a team of over 75 people that does all of these. For the cost, it’s like having… it’s almost… Somebody, who was it?
I think it was [Bret Burris 00:11:51] that said… It might have been Bret or Jimmie and said, “It’s hiring you guys, you’re an extension of our marketing and sales team like you guys are that extension.” It’s like we hiring a COO and a chief marketing officer, a chief operating officer and a chief marketing officer to help us out for like 10 bucks an hour to do all of this stuff. At the end of the day, we’re doing the marketing.
Then ultimately, we’re giving up and scheduling appointments. They’re pre-screened, motivated, ready to go seller. It’s like instead of talking to hundreds or thousands of people, why not just be in front of the three or four per day where the sellers want to sell? That’s first and foremost. The other thing that we have found is the type of list. I know you know this because you’ve been in the CG. One of the things we have found with the mailing list, not all list are equal.
Gary: The absentee owner. It’s really a burned out landlord. We’re finding an absentee owner that has an inherited type of property which means they inherited it from another family member. They’ve owned it for typically 10, 20, 30, 40 years. Those are the gem properties. We actually found that there were 18 million of those properties in the United States. That’s 10%. One out of every 10 houses is absentee owned in America by the way, is absentee owned and inherited in high equity which means they either have no mortgage or a low mortgage.
Those have been incredibly fruitful and hard to pull. A lot of people, they don’t know how to do it. It’s so expensive, right? It’s time consuming, et cetera, et cetera. We’ve really continued to craft and crack the code. One of the things that’s great, we got 250 people with us. Some people are doing $1,500 a month in marketing. We got others, they’re doing 50,000. We’re able to pull all that data, write the results of what’s working and so it gives us better insight all over the country.
I talked to [Clay Manship 00:14:01]. Clay Manship, he did $2.3 million. This is a young guy. He’s in his mid20s in Indianapolis. He did $2.3 million last year in whole sale flips and 1.3 million of that came from us, so came from direct mail using our mailing list. I think his average was $620 in marketing spend per deal and now it’s starting to go up. He is getting more competition and there’s definitely competition in the country.
Matt: Okay. Let me ask you to pause for a second. I can actually vouch for those numbers because I have a few of my own REI Ace clients that are also clients of yours and they’ve got nothing but good things to say about it. To hear Clay’s numbers, I’m not surprised at all. I’m going to try and ask the question I think might be going through my audiences’ mind. I’ve answered all a lot of these questions myself already but I just want to get a different perspective and be totally surprised by the answer, okay?
Let’s start at the top. On the marketing, right? We talked about lists. I know Chris Richter is a good friend of mind, a good friend of yours and that’s all he does. He very much geeks out on the data and pulls really high quality list and his secret sauce is he explained to me was he doesn’t necessarily go and look for the people that are probably going to sell. He starts with a giant list which gets very expensive and then eliminates all the people that probably aren’t going to sell and then you’re left of what’s left over, right?
That’s his methodology. When you’re pulling your list and which one… Do you have like a message or an idea or I think your message popped up and I said message, funny. Do you have… what’s the word I’m looking… like a philosophy on how you or a strategy on how you pull your list?
Gary: We’re very similar to Richter. We do what’s called the scoring algorithm. Most people go to ListSource or RealQuest. They’re doing a search. They’re clicking a button. It says the absentee owner and they’re putting a last sale date of like 2008 or before. They’re losing all the gems. The only way to get the data is what Chris Richter does which is going out and getting the big list. When we’re building a mailing list for our members, like Indianapolis is an example, we’re going to go and pull the big list which is probably 250,000 names and addresses.
Then all of the data around it and then we’ll start scoring it. We’re looking at like last sale date. If it’s blank, it typically means the property has been held for more than 30 years. Those are high value targets. We’ve seen those are higher probability. Those are going to get a higher ranking. If we’ve seen inheritance deed change on affidavit of debt, there’s about six or seven different classifications. We’re going to score that higher.
We are going to look at the absentee owner. By the way, there’s multiple ways of looking for an absentee owner. There’s actually a checkbox and there’s also some different addresses. We actually score multiple ways. There’s information on the area. We’ll also look at the cash buyers. We’re looking at the cash buyers with the number of transactions via zip code and ranking them because the ones where there’s more cash buyer activity are going to be higher probability of good targets for our members.
We’re scoring that then we’ll take the 250,000. We’re usually narrowing it down and we’re picking. It’s typically about 18%. About 18%, so I’m giving all of this data. The problem for most people is if you go out to a company and you buy a list for 250,000 names and addresses, it’s expensive. Let’s see, last month we bought two and a half million records, mailing records for our members. We’re doing that on a month.
We are able to negotiate massive discounts nationally with these data providers. In fact, I go directly to CoreLogic and I’m able to get right into their data center that nobody else in the country can do because you’re going to have to spend $20,000 a month with a guaranteed contract for a year. That’s one of the values of us like working together.
Matt: Sure. You can compound all those or the cost or [crosstalk 00:18:31] the savings, you can compound the savings.
Gary: Yeah. I talked to [Steve Carlson 00:18:35]. He’s also a CG guy, also uses Richter’s list. I just talked to him last week and I interviewed him for one of our podcast. He said he looked last year. He’s in San Antonio. I asked him. I said, “What’s your best performing marketing channel?” He said, “I looked at last year’s numbers because I made my biggest deals, my most profitable deals came from what we call our invisible list.”
It was pretty good. We’re able to see the results. I had the ability of saying, “Hey. How many by the list and the type of postcard, what’s the response rate? How many of those are turning into good net leads, what we’d call viable leads. How many are turning into appointments, contracts and deals closed?” We’re able to adjust and say, I’ll give you another perfect example of two postcards. You’ve probably heard this one.
It’s called the Pink Doodle. This is I think [Joe Taylor 00:19:31] was one of the… I think he may have come up with it, multimillion dollar investor. Pink Doodle, it’s on pink paper. This has been super popular. Everybody’s talking about the Pink Doodle and then the Google Street View postcard. Then on the right hand side, you got and this was actually Brad Chandler from Express Homebuyer. I actually think that this card came from Michael Jake by the way because Michael said, “Hey. You guys are sending this postcard at my market.”
Two postcards, now the question is which one performs better. Everybody has been doing this Pink Doodle. I’ll tell you the 1031, the one on the left, the ugly little white typewriter outperforms four to one. I’m going to get four times the number of calls on this 1031 exchange versus the Pink Doodle. By the way, the Google Street View isn’t performing at all. We’re seeing very few results. This is averaging about almost 4% response rate nationally.
We got a lot of markets, about 1.6 Google Street Views, typically around 1%. I love it because a lot of people are chasing the wrong, right? They’re… maybe they got the right list. They’re using our list to Richter’s list but then they’re using a wrong mail piece and all of the stuff, getting it right makes a big difference.
Matt: Gary, you see this like this Pink Doodle postcard used to crash, right? The Street View postcard used to crash when people of course… I mean I’ve got a bunch around properties. I get these pieces all the time. Now, I get six Street View postcards for each property and it’s the exact same picture, so it doesn’t standout anymore.
Gary: Yeah, right? Yeah.
Matt: Other one you have over here, the 1031 Exchange, this is just a new version that looks different than what’s everything else that in people’s mailbox and everyone after they watch this are probably going to go use this and it’s not going to work anymore and there’s going to be something else to follow up and that’s going to work, right?
Gary: Yeah. Do you remember, we were the creator of the third notice and it’s called [Shekinah 00:21:30] and by the way, still performs. When Chris Chico designed that, and he and I partnered on REI Vault and so but then everybody started using it. When we first started using that third notice, we were averaging over 12% response rate. Now, today, it’s about six which is still pretty fantastic.
Matt: Yeah. That still works for us actually.
Matt: We like to send it out first because it gets such a high response rate that it just fills our database and our follow up system with a bunch of people.
Matt: Then [inaudible 00:22:00].
Gary: At the end of the day, here’s the reality, you got to get it out. So many people, so many investors get stuck on the littler fairy dust postcard to finding a better postcard or a better list. At the end of the day, no, there’s a couple of list, go get them and mail, all right? It is a numbers game. Even if you’re averaging 1% response rate or even less, I know guys like [Justin Colby 00:22:25], I think he works on a 0.4% response rate in Phoenix and still makes a ton of money.
He’s a seven figure investor. Got to get the marketing out, number one. Number two is it’s a return on investment. Marketing is always a return on investment. You spend the dollar, plan on making six or plan on making 10. Even if you’re making around $4 if you’re a wholeseller, that’s fine in this market. The number you need to know is what is the cost per deal and what’s my profit per deal? Cost per deal means, “Hey. I’m going to spend $2,000 to make $15,000 in wholesale flips.”
That’s a seven x, 700% return. Hit it out, right? The next thing is that you or your sales guys just assume all leads suck, all the leads coming in, all the leads off of the direct mail are going to suck. If you have that mentality, you have to talk to these sellers. You have to ask them the right questions, right?
Gary: It’s a human interaction. It’s funny because I can’t tell you how many people in the past I’ve talked to and they’re like, “Yeah. My direct mail hasn’t been working.” It’s like, “Let’s talk about how many sellers have you called.” It’s like, “Okay, what about this seller? What about this seller?” and they never call them. It’s like somebody has to have a human interaction. You have to make an offer.
Matt: Hundred percent.
Matt: Yeah. How do you find the deals? How do you find out more deals? How many people did you talk to? I sent out a hundred yellow letters and no one called. That’s why you didn’t do any deals because you didn’t actually talk to anybody. There’s all these great tricks and gimmicks and gadgets and these fancy postcards and the flavor of the day but if you’re not talking to anybody, it doesn’t matter.
I think the one thing that you touched on, consistency is key, right? You’ve got to be consistent as you pointed out, our friend of the show, Justin Colby, with a 0.4%, he’s just consistent with it and that’s why it works for him, right? Then also looking at it as… if you’re looking for a four to one return on investment of your ads spend, you still might have to spend $10,000 to get the 40,000, right but that all just comes through consistency. What is your advice for someone who has a small marketing budget?
Gary: Spend the money and get it out. Do it on your own. Chris Chico, here’s a perfect example. Chris Chico, this is years ago, he got a Discover card in the mail and went for $10,000. Innately, he loves sharing the story. He had $10,000 available on the credit card. It’s like his credit actually wasn’t all that great at the time and so he used all the $10,000 to mail and made a hundred grand. By the way, he’s made millions of dollars since then.
Gary: He would have never done it if he didn’t spend the money on marketing. Marketing is a return on investment. If you have… Most markets, $1,500 to $2,500 in marketing spend on average across the country should result enough leads to convert into a deal if you’re talking to the seller and you’re working-
Matt: How much was that, 2,500 a month?
Gary: Fifteen hundred in the center of the country, 2,500. If you’re in California, you’re probably at $7,000 or more a deal in marketing. If you’re in Florida, you’re probably 2,800. If you’re in Dallas right now, it’s probably close to 4,000 to 4,500 per deal, right? You spend $4,500 in Dallas but if you’re flipping a property, you’re typically making probably 16,000 to 18,000. It’s still a four to one return across the country.
Gary: If you get it out, number one, I do think it’s important. I come from a sales background and so there’s the discipline. There’s the art and the science and they give the science. This is time tested. Even Ron LeGrand and Lou Brown and all the old timers, these were the same numbers and Dan Kennedy. Doing direct mail and frankly even cold calling probably even close to pay per click, 45 leads, all right?
Forty five leads, typically a lead being a seller, a seller calling, right? You got their information. Forty five of those leads, about one third of them are going to be viable or what [Shaun 00:26:40] and a lot of us called net leads, right, the good ones where the seller didn’t hang up and they didn’t tell you to be removed from the list or they’re not interested. Forty five turns into 15. About half of those should be made offers too.
That gives you about seven. By the way, overtime, you should make all offers but seven of them should get an offer, a written offer. One of those out of the seven should close. That’s if you’re not even very good at this business, right? Then it’s just optimization. I know Justin and I were talking about it. His number is 50. I think that that because of the competitive market especially in Phoenix. If you just plan that, it’s like okay, how much money do I have to spend to get 45 leads? Right?
That number is very… you can calculate that. In fact, I have a tool. I’ll give it to all of your listeners. They can calculate their own we called the score card. They’ll tell you the exact cost per deal, the number of leads you need, the marketing budget. Put that in the show notes for you at the very end, is that cool, Matt? Or I could just-
Matt: Yeah, 100%. Actually, we built up a webpage just for the services that we like and trust like yours. There’ll be just one place that they can go until they get it. We’ll talk about that in a minute.
Gary: Awesome. I’ll give everybody the script so if you have any questions on what to say to a seller to get a yes, the script of what to say… You could actually give this if you don’t use REI Vault to do the phone work for you, you can give it to somebody else and say follow this. This is the same script we use. It’s incredible. In fact, a lot of the CG guys actually helped me, Clay Manship and others helped write the script of what to say, the exact question, the ice breaker, how to-
Gary: No. I’ll give it to you guys.
Matt: Great. We’ll put that up there then. Super, thank you very much for that. All right, so we got the list, we got the mailing piece. Do you do letters at all?
Gary: We do. Actually the letters, the best letters… in fact, I will show you one… the best time to use letters is going to be for follow up and here’s the example. This is the letter. This is actually the best performing marketing piece. It’s been the best piece for over 10 years. This is a follow up, a million dollar follow up letter. In fact, I’m living in a house right now in California I bought off of this letter. The seller called off a postcard.
She said she wanted to be removed from the list. She was concerned on why we were sending mail to her? We actually are sending it every day by the way because we really wanted the house. Got on the phone and then we sent her this follow up letter. Three months later, she called and said, “Are you still looking to buy the house?” and I bought out within contract that day. It’s a yellow letter and it goes into… This is really the only time I like yellow letters but it’s got a fake cancellation mark.
These things need to look like they were mailed locally, super important. Red ink versus blue, believe it or not, the red ink will twice perform the blue ink. I have no idea why but it’s just a fact and then needs to be personalized. These are great. We have a lot of our members that signed up and one of the first things we do is say, “Hey. Give us your old crappy leads, all the stuff that you have not been able to close. We’ll take those and we’ll put them on this follow up letter and we’re turning deals off of it.”
Gary: That’s a very first thing, we’re like, “Let’s take the old crappy lead.” That’s typically when we’re sending out letters. We are testing a new offer letter. A lot of us have had pressure from Opendoor, right and Offerpad and Zillow. We are working. We have a new marketing piece that is a letter. It actually doesn’t even go in an envelope and it is an offer. We’re working on the algorithm right now that we can actually put what’s the price so that we can get our foot in the door.
Usually, we test it out with 10 or 15 of our top members, they’re high volume and then we test it out. Once we see it working then we produce it and pass it to everybody.
Matt: Yeah, we’ve used that in two different scenarios and have gotten great results with it. One is an offer that my guy, Josh in Nebraska, he sent it out to 175 people that said no to him, [inaudible 00:31:10] is the right number and he got 51 deals out of it, the offer.
Matt: If the numbers are a little bit bigger then said, no but he just took everybody that ever said not to him that year, sent the thing and 51 of them came back signed which I thought was extraordinary in numbers. It represent a half of this production for the whole year.
Matt: The other thing that we do is we do our own version of factor stacking over here. We’ll take the absentee list and the divorce list and the taxing list and put them on top of each other. We give them a little score depending on how many list they appear on that name. Those that have the highest score, yeah, we put a sign purchase agreement inside of a FedEx envelope. We may only have 15, 20 of them so, right? Those that have that appear on all those different list like they got issues. They need some cash, right?
Matt: Yeah. Do you do anything like with them, the lumpy mail or anything like that?
Gary: We did, years ago. I’ve sent out 500,000 or 600,000 pieces of lumpy mail with a candy in it, I mean the garbage can where they crumpled up. None of that is relevant anymore. Basically, good copy will I produce. Dollar to dollar, it’s not just the response rate, it’s the cost, right? It’s the cost and so and like why we like postcards, we like postcards to generate the lead, to generate the first phone call and then offer packages, text messages, follow up letters.
You never really need to send a seller a postcard after they’ve called. There should always be follow up letters. You’re talking about the offer package. [Kent Clodier 00:32:49] and I, you were there at CG. Kent was telling me, Kent basically said he did a test. He’s a massive mailer, right? He did a test in San Diego and he said, “The best thing that ever worked was a FedEx envelope and an offer.” He goes, “I never even talk to these sellers.” He said, “We just got really busy and I’ve never done it again.”
I reviewed this with him and this is what we came up with. We’ve been doing this for our members for years. This is what we call… It’s kind of we call a one click offer. This is a press of a button that goes out but it’s a fake… I shouldn’t call it a fake. It looks like a FedEx envelope. It’s got the label on it. The company is actually in Florida so if anybody wanted to go do this themselves, you can. These envelopes, you definitely want to use the full size one.
We’ve actually tested the smaller half size to save some money and it doesn’t produce as well. We put an offer letter. It looks like it’s handwritten. Again, we do this for our members. You don’t have to do anything. You click a button. The sheet of paper’s worth an offer price, a 180,000 for the next 30 days. We have some good marketing copy of the difference between selling to us and selling through somebody else.
Then two sign contracts, one page, cash offer and a return envelope. There’s a return envelope that we stick in there and all they do is put a stamp on, stick it in the mail. That’s worked really well for us. Same type of thing, it’s like one way or the other, get an offer in the hands of these people, right?
Matt: Hundred percent.
Gary: I was just chatting with… who was it yesterday? I’ve had somebody I talked to, Pat Hiban, do you know him? He runs Gobundance.
Matt: I’ve seen the name.
Gary: It was Steve or Mitch Steven. We were talking about how a seller wanted $180,000 and he’s like, “There’s no way that I’m going to offer more than 105.” He set an offer at a 105. His team wasn’t going to do it. He said send the offer for 105. Sure enough, the offer came back signed, right? The seller was absolute… there’s no way they’re going to take less than 180. They sent in an offer, right? That’s the business.
Matt: It’s so good. It’s so good. This is why the emphasis on right offers, right offers, right offers and I did a blog post of that. It’s about eight years ago, nine years ago. It’s how to do more deals. The whole blog post just said, “Write more offers.” The whole dynamic changes when something is in actually in writing, right?
Gary: Yeah. We have a video for this. We have a Coach Willy. I’ve sent this out to so many REI Vault members, right? It’s this is just classic sales but they did a study, a dating study on who, guys who could date more women, okay? True study. They basically said, “Okay, we’re going to take one guy and give them the perfect script of what to say like how to schmooze a girl and the perfect words to say and all that.”
Then they have a second guy, they gave him the great looking car, the Ferrari and the suit. Then the third guy, they did nothing, they just said, “We want you to just ask more women out on a date.” Guess who won?
Matt: The guy that asked more.
Gary: Asked more… This is a numbers game. By the way, this is just classic. This is a sales business, right? The money, there’s marketing and there’s sales. If you don’t know, there’s a sale on everything like husband and wife. If you don’t know whether you got sold, you were probably the one that got sold.
Matt: If you’re not selling, you’re getting sold, exactly.
Gary: Yeah but it is a lot of fun. It’s not that hard. It’s people, it’s a human business. People buy and sell to people that they like, trust, and respect. I can’t tell you how many… There is a gal, one of my favorite deals, she wanted 750,000 for the house. [Kay Bore 00:36:59] was her name in California, beautiful house, 750. On a good day, I think I sold it for 550 and she’s like, “750. I cannot take less than 750.”
I went in to contract for 410 creatively. It took me six months. It was a six month transaction but 750 from what they want, so remember, it doesn’t matter what the seller wants. You have to make them an offer. There’s a psychological, there’s a point in time when these sellers will make the decision to sell, right? Usually, if they want a high price, they’re just not emotionally ready to detach from the property. It’s a big decision for them.
Matt: Right. Perfect. All right, so we’ve got the list, we’ve got the mailing piece and the different ways to send that and the different times to send it. Now the phone rings, tell me what happens.
Gary: Yeah. The phone rings, we recommend… a lot of our members, we recommend somebody take the call live. A lot of our people actually have somebody in their office to take the call live. We’ll usually set up any overflow phone works that needs to get done, so 24/7, there’s a phone team. We like PATLive and we like Call Porter. We partnered with them. We’ve cut special discounts for our members. We’d given them our scripts. PATLive isn’t just PATLive.
They’re actually on our script that’s tied into our system. That’s like PATLive on steroids. A lot of these calls, a lot of the work though, here’s… You know that I’m a numbers guy but this is a national, I didn’t make the number up. This is across other industries as well but 80% of all the profits in real estate come between the fifth and 12the interaction with the seller. Most people, they’re only talking to the seller ones, right?
They’re taking the call live and they never talk to them again. What we do is we put the… This is called an inside sales team, ISA. If you’re looking at the screen here in front of you, it’s the outbound phone team. This is the team that’s actually doing the call backs, right, dialing for dollars all day long on leads that have come in already. A lot of sellers, some of the best leads we’d ever seen are hang ups, people that call in and they just hang up for some reason, right?
Or they call in and they say they’re not interested. Those are gold mine leads by the way but you have to wait for four months. They’re not going to be any good for four months, you start calling them. We’re converting those like crazy right now for our members. Our phone team, we actually set up a Podio system unless our members have their own but those leads automatically get pushed over to an auto dialer that we have set up.
We use Five9. It’s all integrated. Our members don’t have to, our clients don’t have to set up anything. The leads come in. They get pushed over to the auto dialer and then we have got a team of over 25 people that are actually dialing for dollars all day long trying to get the seller on the phone. If they don’t answer, they call a few hours later. If they don’t answer, they call the next day and over and over and over again.
Matt: Sweet. You can go to buyheregetmore.com and I’ll put up the KPI spreadsheet Gary is going to give us and then he’s also going to give you the script. I would imagine I wish we had time for the full demo. Do you have a link you can give me to like a video demo of the whole system in play?
Gary: The best place would be at reivault.com. I’ll give it over to you as well.
Matt: Okay. It’s all in one place. They can just go there then go to Buy Here Get More and then we’ll go from there, all righty?
Gary: Yeah, perfect. The one thing I would say if you’re ready to scale and you want to check out REI Vault, just make sure that you tell us that you came from Epic or Matt Theriault, we are an invite only group. This is like a mastermind so we want to make sure you’re a good fit for us and we’re a good fit for you. Just make sure you tell us that you came from Epic. The reason is that you get a lot of people, they don’t know how to close deals. They haven’t been coached, so really it’s the people like our members are referring others to us. Just let us know that Matt sent you.
Matt: You bet. Perfect. Thank you, Gary. We’ll do this again though because there’s a lot more than we could cover but it’s good to see you again. Your podcast, you got a brand new podcast, plug it real quick.
Gary: Yeah, realestateinvestor.com, huddle.
Gary: Huddle, H-U-D-D-L-E, yeah and my company is realestateinvestor.com.
Matt: You sneaky guy. I’m envious of that domain name you got there. Congrats, couldn’t happen to a better guy. All right, Gary, take care.
Gary: All right, Matt. See you.
Matt: You bet. Alrighty, so that’s it for today. I’ll see you next week on another episode of Thought Leader, Thursday right here on The Epic Real Estate Investing show. Take care.