Are you closing 139 deals per year in your real estate investing company?
If not, you’ll discover how to do that in this episode — whether you have years of experience or are brand-spanking new.
In this episode, Andrew Newlon joins me to discuss how he scaled his company from working on a couple fix and flips a year to doing 139 deals a year.
Andrew only works with two small markets in different locations.
Listen to the episode now and unlock the keys to massive growth and success in your business.
Show highlights include:
If you’d like to learn more about Andrew and connect with him, you can find his website at OzarksHouseBuyers.com. Or you can follow him on Instagram here: @newlon_andrew and Facebook here: Ozarks House Buyers on Facebook.
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You're listening to the “REI Marketing Nerds” podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords Nerds, a high-tech digital agency, focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition, and live a freer, more awesome life. And, now, your host, Dan Barrett.
Dan: All right, hello, and welcome to this week's episode of the REI Marketing Nerds podcast. As always, this is Daniel Barrett here from AdWordsNerds.com—and, as always, you know if you want to get more leads in deals online, you know where to go. It's AdWordsNerds.com. We can help you out. [01:02.2]
This week, we are coming in with an absolutely killer interview with Andrew Newlon from OzarksHouseBuyers.com. If you don't know Andrew, he and his small team have done over 139 deals in the past year in just two relatively small markets. They have done it the old-fashioned way by connecting with people and really, really paying attention to the details.
This is a really fun interview. We talk about where the market has been, where Andrew thinks it's going. We've talked about process. We've talked about running your investment business like that, a business. We've talked about the importance of follow-up. We talk about the marketing channels that he's using right now that are working. We talk about his experiment with TV ads and so much more. I cannot wait for you to check out this interview with Andrew Newlon. Without any further ado, let's get straight to the interview. [02:03.2]
Dan: All right, I am here with Andrew Newlon from OzarksHouseBuyers.com. Andrew, welcome to show, man. Thank you so much for being here.
Andrew: Thanks, Dan. I appreciate it.
Dan: I’ve got a whole bunch of stuff we were talking about before we started recording and we've got a whole bunch of stuff I want to get into, but for people that don't know, you aren't familiar with what you're doing over at Ozarks House Buyers, give people the elevator pitch. Who are you? What's your business? What investing do you guys do?
Andrew: Yeah, we are a small real estate investment company in Springfield, Mo., so that's the southwest part of Missouri, the Ozarks, and in Lubbock, Tex., on the west side of Texas—similar markets. Both have 150,000 to 250,000 people in population. Then we have the [Swan - 2:45.7] area, nothing to get crazy about. But we focused on three things. We buy a bunch of rental properties. We do some fix and flips, and we wholesale properties as well. This year, I think we did 139 deals -
Dan: Wow, awesome. [02:59.4]
Andrew: - from both markets for 2021, a significant growth in Lubbock. Lubbock is much newer than our Springfield operations, but one team that services both markets. We're really good with direct to sellers, so we do a lot of marketing to sellers through online ads, through our website, through direct to mail, some outbound dialing and texting.
That's our unique ability, working with the sellers on their tough situations and turn around and either sell it to another investor, which we don't do as much as fix and flips now. Then, we have a rental portfolio as well.
Dan: Now, did you get started primarily wholesaling and move into fix and flips and rentals, or did you start doing everything off the board?
Andrew: We actually started with a couple rentals. We didn't know what we were doing. When I was much younger, I was working on some friends. One of my friend's dad was a landlord, so we were working on his houses just for work in the summertime and stuff.
Dan: Just fixing them up basically?
Andrew: Yes, we just learned how to do drywall, lay flooring and trim, and paint cabinets, and he was like, Hey, you boys want to come over and make some money? We were like, Sure. I had no desire, had no idea what real estate was. It wasn't even a thought, but I did know he had a bunch of rental properties and he was what he called “free”, right? He wasn't extremely wealthy, but he was his own boss and could do whatever he wanted. [04:11.0]
Then, fast forward a couple of years, my friend and I were like, Hey, why don't we buy a bunch of rental properties? We entered a game thinking we’d buy a couple properties at a time, take some of ourselves, and eventually we'd be chilling on some beach and the small island in the Caribbean, super-wealthy.
We quickly learned that that's a very slow progress that we couldn't quit our jobs and we were working until one o'clock in the morning remodeling these houses, weekends, New Year’s Eve, New Year’s Day, I mean, all the holidays. We were working, busting our butt, so we didn't have the income.
We went to a couple of the guru boot camps in real estate and stuff and then we figured out what wholesaling was. We weren't attracted to it, but we went through the steps and we sent out the letters. We put some bandit signs out and we got some traction. We actually did a deal or two, and so we quickly realized that we could at least do enough deals to replace our income so we didn't have to work so late remodeling these houses, bring it up to speed, and it turned out we were really good at it, so we just kept going. [05:04.5]
There was a pivotal moment where we switched our mindsets to where we were a wholesale business. We entered a mastermind taught us how to structure it a little bit better, and then in the last 18 months, we've pivoted to where we're not wholesalers. We're real estate investors. We do everything.
Dan: Now, let me ask this, too. You mentioned at some point you kind of started getting traction, started getting a couple deals and you realized like, Oh, we are good at this.
Dan: What do you mean by that? What clicked for you where you were like, Oh, this is something I can really do and I can do well?
Andrew: I think it was, let's say, a skillset. It was more that we were taking action. We were doing it. We weren't afraid of messing it up or not having all the answers. We were sending out letters. We were figuring out how to hire people to take the phone calls. We were going out there and talking to people, getting the houses under our contract. We were building a lot of good relationships. We were working our buyers, at the time, backwards almost, you know? Because I think most people getting into wholesaling, they're scared of what to do with their houses. Especially if you have ethics, right? No one wants to get these houses in a contract and not be able to sell them. [06:07.4]
Most of the people we work with are in difficult situations and there was a time where we wouldn't close on a house. We close on everything now. Even if we're in a wholesale, we buy every single house and put it on a contract, but there was a time period when we couldn't. We didn't have the private money raised to do that.
We knew our buyers very, very well. We went to lunch. We went and had coffee. We supported them. We helped them out in the projects. We built really good relationships where we could get this house and kind of work it backwards, say, Hey, what do you need to buy it for? And as soon as we started figuring out each of our buyers’ niches, then we could make something out of every single lead coming through.
That and the fact that we could remodel the houses ourselves, too, helped out a lot, so we quickly realized that if we couldn't wholesale it, we would buy it, do the work ourselves, cut down on costs and keep it as a rental.
Dan: It strikes me, it sounds familiar, right? Although a totally different skillset to kind of when I started sort of transitioning from just being a freelancer to really running AdWords Nerds as an agency, and one of the turning points is is that moment when you're like … [07:11.8]
I wasn't a business person by background, right? I came from being a touring musician and then being a teacher, and so there was always this thing in the back of my head where it was like business is something that dudes in three-piece suits do, you know what I mean? I didn't think of myself as being good at business and there was some turning point where you were like, Oh, I am kind of good at this. It's just working with people. I know how to do that.
Is that kind of what it was? It's like, Oh, I could actually run this more as a business and understand it at a deeper level than maybe you thought you could do when you were primarily just putting up drywall and stuff like that.
Andrew: I think that's the thing. I see it more now, but a few years ago, I think it was normal to get into business and do all the work yourself. You take the phone calls, you look at the houses, you put it under contract, you're working on the houses, and you still have traditional people like that. It’s that concept of like, what can I step out of? We can really structure this as a business. [08:07.6]
I'm the same way. I have no business background at all in any way, shape or form, and I had leadership experiences and I quickly realized like, If I can just get the right people on the team, train them in what to do, then we can repeat this at a higher scale. Once we realized that all we were was exposed to other people doing hundreds of deals a year, the same thing we're doing, and realized the possibility was there. You just had to rearrange yourself.
Dan: When you made that business mindsets switch—you mentioned that before, too, right?—you really started running it as a business. Was it primarily about that shift of focus away from doing everything yourself to building a team? Was it something else? What was that switch?
Andrew: Yeah, it was team. We hired a lead manager to take phone calls and help us log admin tasks, so realizing that we can bring someone on and afford it, consistency. Prior to that shift, we would do marketing, get a deal and wait until we were ready for our next deal and do more marketing. Truly look at it as an investment like, Hey, we're going to spend X amount a month and we will get that return. We just have to stick with it over and over. [09:14.4]
Then the processes, like, how do we actually streamline this, use actual software? What happens when a call comes in? and put more of a frame on what we do. At the very beginning, anytime you get a lead, you're like, How can I make money out of this deal? in every situation, every which way, but it got to the point where it was like, Hey, this is not one. These are two or three things. We're just going to pass on it, so we can streamline this and make it a consistent movement.
Dan: Let's talk a little bit. I want to transition a little bit and talk about the market. We were talking about the market earlier before we pressed record, and you and I are recording this in early 2022, which is early enough in the year where it sounds weird to say it out loud. Right? It's like every time I write it, I'm like, this just feels weird.
Dan: So, really early 2022. We're coming off of one of the weirder years in real estate in memory. [10:04.3]
Dan: Talk me through a little bit about what the last couple years have been like for you guys. There has been a whole bunch of [changes]. We were talking about displacement from the pandemic and a lot of real estate markets heated up. Some shifted really fundamentally and you guys are in these two different markets that are both a little similar to one another. What has that story been like for you guys?
Andrew: Yeah, fortunately for us, our two markets are almost identical. I mean, price range, your demographics, your industries, so we’ve got really lucky there. I couldn't imagine being in small-town U.S.A., and then in, say, San Diego at the same time. There are two different sets of operations and procedures and everything, so we got really lucky there.
But the last two years have been a blessing in disguise. I think, at the very beginning, we had a quick shock of like, how are you going to handle yourself if there's a dramatic change in our business or in the marketplace? Then we all forgot about it because the market was very forgiving and took off very well. [11:02.7]
For us, people are migrating like crazy. People are leaving California, West Coast, East Coast, Texas. All these different states are changing and the population is booming. There are people native, so those areas are trying to move out, and not necessarily to ours, but to local areas like Kansas City and St. Louis. Those natives are trying to move more rural, so this rural migration, which is what we call it, has really helped us a lot.
Dan: So, you’ve got people from really, really gigantic metro areas, moving to smaller metro areas, and people from smaller metro areas moving into more suburban and rural.
Dan: Interesting. I hadn't really thought about it like that.
Andrew: Yeah, it’s kind of like a cascading event.
Dan: Yeah, fascinating.
Andrew: We had both, plus--
Dan: The people moving to where you are, aren't so much, I sold my Sex in the City Manhattan-style apartment or whatever and not moving to Lubbock. It's more like, yeah, people from Kansas City or whatever. Yeah, sorry, I didn't mean to
Andrew: Yeah, both. We're seeing both of that, right. We are getting a lot of them. I would say, our number one offers are coming from people from California, and they're our favorites because they're usually cash, site unseen, and that has kind of simmered a little bit. It's not like it was last year. [12:14.5]
But, yeah, we get this huge rural migration. The prices are cheaper here. It's the cost of living. A lot of people are able to work remotely now, and so if you're in Silicon Valley, now I’ve got a family member that works for a big tech company and the pay cut he took to move is less than the freedom that he's getting, and so he's making just as much money, if not more. He moved from San Francisco or to Kansas City, working remotely, and nothing has changed. The cost of living is extremely low where we're at.
Then the fear. If you have concerns with COVID or population or social distancing, obviously, you come to a smaller town. It's a lot more open. On the flip side to that, if you want a town that's less radical on their decision-making on how to approach COVID stuff, you definitely have that as well. We're not locked down. We didn't suffer what these big cities in liberal states have suffered. [13:13.3]
Yeah, we just have so many things as to why people want to move and they appeal to all audiences.
Dan: It's really fascinating, right? I'm very curious, 10 years from now, if we look back and say that was the time where we really shuffled the deck population-wise, right? It’s like, what does that mean? Right? It’s going to be so interesting.
In terms of housing prices, you were saying you guys are still seeing a basic upward trajectory, but you feel like the slope is a little less extreme. It's not so much the billionaire from California that's like, I paid $4 billion for a one-room apartment, or whatever. It's still up, but it's a little more even. You feel like you are on a-- [14:05.5]
Andrew: It's still going to be increasing and I don't think it's going to stop for a while. I really think an event has to happen, and I think kind of back to what we were saying earlier, too, with this migrations thing is, we've entered a new society to where I think dramatic events are going to be more regionalized. Right? If there was a market crash or something, I think it's going to be in specific regions instead across the nation. I think we're balancing ourselves out a little bit, like our eggs are in different baskets as a nation.
Andrew: To play back into that, yeah, our prices are still climbing. They're not climbing as much as they were before, but they're still going to climb. I don't think anything is going to change anytime soon, but that buyer activity has slowed. We're not getting a dozen or two offers within the first 12 hours. We're not getting a lot of highest and best, or no appraisals on inspections.
They're starting to come back to your normal offer structures. We're still selling for full asking price, sometimes a little bit more, within 24 hours, so it’s still very much a seller’s market, but the activity seems to slow down a little bit. Prices ARE still going up. Every time I buy a house, then by the time we get done with rehabbing, we’d go to the market and we always list it for much more than what we thought we'd list it for when we’d bought it. [15:15.8]
Dan: We talked about this a little bit that 2021 was really this multiple-effect sort of year where you had a lot of things driving people into investment markets of various types. Right? We were just chatting and I was saying I kind of got interested in crypto. Crypto saw this boom year. Everything kind of saw a boom year, right?
Dan: I don't know this for a fact, but somebody tells me baseball cards saw a boom year, or my band put out a record 10 years ago and that record sold more last year than it sold 10 years ago because people got into vinyl record-collecting. It was just a weird year, people just
There's sort of a simmering of demand. Have you seen a rise in supply? Because I know a huge part of that narrative of last year was there's a lot of demand for stuff and you couldn't get a lot of stuff. There was sort of a limited housing supply. There were construction supply limitations. You couldn't buy a PlayStation. It was like all sorts of stuff was happening all at the same time. Have you seen that loosening up a little bit, at least where you guys are or not so much?
Andrew: No, I think supply is an issue across the country. I think that is one thing that is not regionalized because it all comes from the same place. Housing, definitely. I mean, because money is so cheap and accessible right now, and so everyone is able to go out there and buy another property. These people want to start investing in properties or buying single-family houses and duplexes and stuff, and their performers are different. They're not as conservative as, say, we might be as active investors, and so that plays a huge role in the supply as well. [17:05.0]
As far as our rehabs, yeah, actually, materials, it is still an issue. Every week there's something new that we can't get our hands on. The biggest is labor. We just cannot get the right people to work in any position in our company, whether it's sales, management, projects, construction. I mean, construction is really tough. I was talking to someone that works in the HR industry; construction is the third hardest position to hire for right now in the country, next to sales, which is number two, so it’s like it's a very difficult time.
Dan: That's really interesting. It's funny because it's like, again, totally different industry, right, but literally the same thing in the marketing space where if you are looking for someone with some background in what you're doing, some experience, it's really hard to find.
Dan: And it's really hard. Even if you want to off-shore it, it's hard to find, right? And that's something that I have the ability that, if I want to hire someone from Yugoslavia, I can't. [18:01.5]
Dan: If you're from Yugoslavia and you're listening to this, call me. No, not really, but you know what I mean. But for construction, you can't. There's no remote.
Dan: You can't do it remotely, right? Yeah, I can see how that would be even more constrained. How have you guys adapted to that? Is it like, look, it's a hard constraint on the number of deals that you can do? Are you trying to train from the bottom up? How are you guys thinking about that problem?
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Andrew: I feel like we can do more volume and we've been smart enough lately to say we need to slow down. We're not overly aggressive. We really put ourselves in a bad bind at the beginning of the scene. [19:16.2]
At the beginning of 2020, we were financially in a hard spot as a company because we tried to grow way too quickly, and aligned with COVID, at the same time, we had a lot of lessons learned. Right now we're saying, hey, we watch our cash conversion cycle and stuff.
When it's taking us longer to rehab these houses from the moment we close on the house and purchase it to the moment we sell it, as that gets longer and longer, we want to take less and less on. Yeah, it's just understanding the time restraints, building it into our prices a little bit more that, hey, if I'm going to hold onto this for six months than for three months, then obviously it’s going to cost me that much more, doubling interest, doubling holding cost, utilities, taxes, insurance, things like that. [19:55.3]
Building or training from the ground up has definitely been successful for us. Our team is primarily made of people that were previously in a management position, store managers, assistant store managers, recruiters, that were in some type of corporate field that they couldn't grow or they didn't like the corporate bureaucracy. They want to be a part of a team where their voice is heard and they could share their passion, and they’re aligned with our passion or vision.
Bringing them in, they knew nothing about real estate and knew nothing about an industry, but they had the experience of managing or growing, and that's what they wanted, so bring them in and let them speak, let them have their voice heard. Yeah, we're not getting the highest and best person that has experience in doing what they're doing. We just have capable people that we can train from the bottom. That has helped out a lot.
Dan: I mean, it makes so much sense, too, right? Because if you're just saying, the only way we can compete for talent is on salary, sorry, but you just can't do that. Right?
Andrew: Yeah, all day long, right. [20:52.1]
Dan: But that kind of person who, and I would be this kind of person, where it's like, yes, I want to make money, but more than anything, I want to feel like what I do matters and I want to feel like I have some autonomy, I have some control over my life, I have some impact, and you are going to get so much more of that with a company like Ozarks House Buyers than you're going to get working at hyper-global megacorp because you’ve got to pass in your TPS report on time or whatever.
I think that whole idea of building a certain work environment, I think people now are much more attuned to that and value it so much more, and I I'm belaboring the point because—and I’ve talked about this on other shows—I think I think for real estate investors now, there's so much more competition. There's so much more competition from both the top and the bottom, right? You've got huge hedge funds entering the space, iBuyers, whatever. You've got, and we were talking about this before, so many more people getting into investing. [21:55.6]
For the type of investor that I work with, the type of investor that you and I, generally, are going to know, who want to do a hundred deals a month, but aren't necessarily looking to be the CEO of hyper-global megacorp, it's how do you create a work environment that attracts that valuable talent with something other than pure salary, right? And maybe it's equity or whatever, it's share growth or whatever, but--
Andrew: I don't think it comes down to the money. I'm sitting here thinking, I’ve got several people on our team that have taken a decrease in salary or hourly wage or whatever of it might be, because it was worth getting out of the position they were in.
When you're a store manager for a big retail store for eight or nine years and you don't have growth other than outside of that as a regional manager and you don't want to relocate, but you're tired of being yelled at every day or you don't get to turn off at night, right? There is no six o'clock and going home and you're getting that two o'clock phone call because the alarm goes off or something.
To be able to come back and say, Yeah, I'm going to lose a little bit on salary, but I'm part of a team where my voice is heard and cared about and asked for, and I get to help build this. They all get excited that they're building this. I’d leave town for a week, come back and there's something new in the company. They've implemented a new process, a new system, a new software or something, and those people get excited. They like it. [23:13.3]
Then you start putting into it like, so one of our core values to impact others, and so when we start making a difference in other people's lives and they get to choose that difference, they get to choose who we're going to impact and how we're going to allocate those funds or man hours, or whatever that is, it really is a lot different than that corporate feel.
Then you can surround yourself with people. It’s just reciprocal, so that you come into the office where these people are super-super-excited about what they're doing. It makes you excited versus a bunch of people that are just checking in and checking out. No one shows up right at 8:30 and no one leaves right at five o'clock in our office. That just does not happen. I mean, it's a great feeling.
Dan: Yeah, I mean, there is just …. I don't know, it's interesting. It does feel like, and this is a really big macro-view, right, but as the things in society become more accessible, the things that you need to live—food, shelter, some kind of sense that you are able to make enough—as those things become more common or more accessible, it becomes more about fun. Where can I have fun? [24:12.2]
Dan: And, ultimately, what you're talking about is that it's fun to build. For a certain person, that's what gets them up in the morning, right? It's not so much just adding another 100 bucks to the paycheck and I think I really like the idea that we kind of compete for talent with fun.
Dan: And that excitement, that sense of adrenaline you get when you build something cool. Let's talk marketing a little bit. This is the REI Marketing Nerds podcast. I should mention marketing. I know you guys do a bunch of different marketing. You mentioned texting and all sorts of stuff.
What are you guys doing marketing-wise right now? You could keep it high-level, but just where are the buckets that you are sort of using? What has been working well? What isn't working well? How do you kind of see that space? [24:58.8]
Andrew: The two buckets that we've always used and never stopped are direct mail and online ads. We've always stuck with it. We know that there are always many low times. There are times that direct mail just doesn't hit right, and the same thing with ads and with you guys or Facebook and stuff. We go a month or two, like, man, it just didn't do well, but we look at it as a long-term investment. That's how we measure ROIs long term. We never look at anything less than a 90-day window. We want to look 90 days all the way up to a year and say, okay, for the last 12 months, we're getting to really see three times our money back on this. Those are always nonstop running in the background and they're hands-off.
We've tried a gauntlet of other stuff. I think at the end of the day, that's the one thing that you can consistently rely on and predict those numbers. We do some outbound texting. I’m not a big fan of it, the same thing as cold-calling. I think I don't like it. I don't want to be on the other end of that as well. I think there are so many people out there in that space.
Fortunately, for our marketplace, both of them, there's not nearly as much competition. It’s all relative. If you boil it down to a per population chart, our competition relates to other places, but our sellers aren't getting two dozen text messages a day. I've got a friend in Memphis. He’s talking to one of his buddies and he literally dropped his phone, like, This is what I'm getting every single day, on a daily basis. [26:15.4]
It doesn't happen around here, so we can get away with it. We do it when things are slow. We'll do some outbound cold-calling, texting. We work our system very well, so these that we've talked to, we'll constantly follow up with them.
We did TV ads last year. It was fruitful, but it was too much, too many leads. We couldn't qualify quickly enough to get the right people the right appointments.
Andrew: Yeah. The volume of phone calls causes not to answer the phone calls from our good buckets, from direct mail, so you're answering all these calls from people that, yeah, they saw us on TV and they'll sell their $500,000 house for $500,000. We couldn't call the seller back that really needed our services and needed to sell his house quickly. [27:00.0]
Dan: Can you give me a sense? Because I'm interested in that. The TV thing is interesting to me. It's not something that we do specifically, right, but it has always seemed to me kind of like you're describing, a giant fire hose, which is good and bad.
Dan: Can you give me a sense of the general lead quality in these, like how it relates to the different buckets? You’ve got like and you've got online ads. You've got TV, and then you've got the cold outreach, whether it's cold-calling or texting. Do those feel very different in terms of how they react, how they close? What's your sense of that?
Andrew: Yeah, it's so much so that we rank them in priority when we call people back, and so we can't answer all of it. Our goal is to have above 90 percent live answer rates, so once 90 percent of people call and we try to answer it live.
Andrew: But that doesn’t always happen, especially if the whole team is in a meeting or something. We actually rank it. Website leads get first priority, day in and day out. We want to get back in less than minutes. Then direct mail, and then, say, we did turn on TV ads, again, they'd be the very last. [28:02.2]
It’s kind of like anything coming off our web forms is like a sniper shot. We are pretty certain that this person knows who we are, what we do and what we offer, and so we want to get back to them. They're a qualified lead 70 percent of the time. That's an arbitrary number, but it's a high percentage.
Direct mail. We do have to weed through a lot of people calling like, Hey, take me off your list, or, Hey, I’ve got your postcard. What's this about? But most people, because we put our website on it, they've gone and looked at who we are. They kind of have an idea. They are getting four other postcards and stuff, so we start to broaden a little bit more, get more people to talk to. They're not all deals, but they are targeted, too. I mean, they're getting our message for a reason. They're on our list for one thing or another.
TV, you're speaking to everyone, every single person, and you can't control that and say, Hey, I want my TV ad to only show up on absentee owners’ TVs or whatever, and it's really hard to get your message across of what you do and what you offer in 30 seconds—and your region. You can't control your region. We’re rural. We're really fast where we're at and our TVs ads are going to Arkansas. We don't do anything out in Arkansas. We're getting all these Arkansas leads, and so the team doesn't know that when you're answering it. [29:12.3]
Andrew: At the time we turned on TV ads, I think we were probably averaging 70 to 80 leads a month, and that first month, we had over 400 leads
Dan: Wow, so a literal -
Dan: - three or four times. Yeah.
Andrew: Yeah, and at the time it felt good, like, Oh, this is great, and we were thinking, How many deals more do we have to do just to pay for TV ads, right? But what we didn't realize was that it wasn't a one for one. We could not physically answer all those 400 phone calls and call 400 people back, and go on all 400 appointments, and so we were losing on it. We knew this list was working. We couldn't even call these people back because we were too busy chasing people that we didn't have business talking to.
Dan: It’s opportunity cost, right? I think that is such a fascinating point and I think it's one of those things where, until you go through it, it is not intuitive. Right? [30:07.4]
Dan: We generally think of it, and I'm the same way, right, when I take on a project or a marketing channel or something, you think of it as additive, but you don't factor in the reality that all resources are limited, and even if you are purely just adding on, it does take away from what's already working. That's really, really fascinating to me.
I think we've talked a little bit about, and you mentioned this several times, you said one of the strengths of your company is that, from the very beginning, you were just really good with working with people, right?
Dan: You were really good at sort of forming that relationship with people. You mentioned it kind of in a different way where you were talking about outbound, you were talking about cold, cold-calling, cold-texting or whatever, and you're like, I don't like to receive those, so I don't like to send them, right, which is kind of the way I think about it. It's like, What marketing do I actually prefer to receive? or whatever and I try to lead with it. [31:07.4]
How do you think about the follow-up process? Because I think, over time, at AdWords Nerds, we've seen—we've very much seen—an incredibly strong correlation between clients that follow up often and well, and the clients that close a lot and have a lot of success with online advertising. How do you think about the follow-up process, and then, once you've followed up, how do you think about building that relationship with the seller and sort of doing that whole part of the deal structure well? How do you think about that stuff?
Andrew: I mean, follow up is beyond important. We put a price tag on every lead that comes in. We have a cost per lead for our company, and if you don't follow up with the person, you're literally writing that check and just throwing it in the trash can every single time. [31:57.4]
Ninety-eight percent of the people we buy houses from are facing a distressed situation in their lives. It's not always about the house. It sometimes is. Sometimes it’s something else going on in their life. Because of that, calling Andrew back with Ozarks House Buyers is not their priority list to do that day.
In fact, when they filled out that web form or they did call off that postcard, it was probably just that prime time for them to get it done. It’s 10:30 at night. They’ve just logged off Facebook. They’re like, Let me look this person up and see. What the heck? I’ll send my information. But the following day they had to face that distress situation all day long and I just was not the top of the list to call me back.
Andrew: And so if I take that at face value and say, Hey, they're not really motivated, then we lose out on a deal because so many times we have a whole entire bucket of what we call “Attempt to contact.” I mean, there's a large percentage of people that call in to us and we didn't get a hold of them from our web forms that we don't come back.
We don't ever give up to these people and they're hearing from us daily for weeks and then weekly forever, and there's a large amount of them that eventually say, Hey, I'm so sorry, I know you've been trying to get a hold of us, but, yeah, I am ready now. For them, it's a big process, and to us, it’s easy. You buy a house and sell a house, and we can get this all done within 24 hours. [33:09.5]
Andrew: All these people sit on it for months and months, if not years, before they finally make that decision. If you're not doing it, you're throwing that money away. You figure out what your cost per lead is and now ask yourself, are you comfortable just writing that check and throwing it in the trash can.
Dan: You're getting at something that I think is so critical, which is we tend to think, if someone contacted us, they must be ready to go, and if I call them back tomorrow, they should still be ready to go.
Dan: It's like, that’s not really how it works, right? The other thing, too, you hit on is that I forget who said this, but I think a lot of people prefer the certainty of a low level of pain over the uncertainty of relieving that pain, right?
Andrew: Yeah. [33:56.5]
Dan: It's like, yes, this house, I’ve got to pay for it or whatever. It's just sitting there. It's a pain in my butt. I’ve got to think about it, but I'm already in that situation, and if I go into this new situation, it might end up being way better for me, where I could sell the house to an investor and make some money. Everything is going to be way better, but I'm uncertain about what it’s going to entail, and do I have to sign a bunch of paperwork and what's it going to be like? It's easier to just do nothing for the vast majority of people, right?
Andrew: How many people have a gym membership they pay for monthly and they don't go to the gym? Why don’t they call and cancel it? Right? Just call and cancel it. But you're like, Ah, what's another 10 bucks?
Dan: It’s so funny to admit, but I no longer have it. I built a gym in my [garage]. I say I built a gym, but when I say I built a gym, my wife set up a gym in our garage, so there you go. I go there now. But I used to belong to Anytime Fitness and I was a member at Anytime Fitness well into COVID times and I wasn't going, and it's like, why didn't I cancel it? They said you had to go in to cancel. You had to cancel it in person, and I was like, I'd rather pay $5 a month or whatever I was paying to go in. [35:03.2]
Andrew: Drive across town, yeah.
Dan: Yeah, sorry, I didn’t mean to cut you off.
Dan: Yeah, they're going to try to stop you.
Andrew: They have no respect for you. Two months off and then you send 12 months and you just want to be sold, so the $5 is totally worth not being sold. We have to view ourselves like our customers view ourselves. They know we're buying at a discount. There's no one that ever calls us thinking we're giving them the full price for their house. They know that we have a way of discovering if they're going to take our offer or not, right? It's a sales process. It’s no different from going to a car lot. You know you're going to be sold.
Andrew: If you're like me, if you have to call AT&T to talk to them about a discrepancy in your bill, you had a late fee and you weren't really late. It's 30 bucks. You're like, I’ve got to call this person. I don't do it right away because I don't have to talk to someone in a different country that speaks a different language that I can't relate to. They're going to give me some resistance. I’ve got to talk to their manager and I know I'm going to be on the phone for two and a half hours. [36:02.1]
I work up that courage. It might take me a month or two before I'm like, You know what? Enough is enough. I'm going to call them today. It took me two and a half months for that prime time, stars aligned, I'm ready to take action today, and if I call and I don't get connected to someone, I'm not going to mean in that perfect alignment for maybe another two and a half months.
I think our sellers are the same way. They know who we are. They know what we’re doing and then we’ll provide good value, but it's no different from buying a car. They know they're going to go through a sales process and our goal is to buy as cheaply as we can. They’re waiting for that perfect time. Like you were saying, the pain is enough today, right now at this moment, at 10:33 at night, to call these people. They didn't answer. Screw it. I’ll just deal with this house for another month or two if I make another decision.
Andrew: When you take that at face value, you're losing opportunity because they're going to call in two and a half months, but who are they going to call? The person that stayed in contact with them?
Andrew: If you didn't, they forgot what your name was. They're going to go find someone else. [36:54.3]
Dan: If you're listening to this, if you're listening to this podcast right now, please, please, please take this to heart. This is the thing, by the way, I think this trend of having more difficulty or a longer sales cycle, right? I think that is increasing, because if you have more competition as an investor, which, by the way, you do in pretty much any market, then people have more options. They're going to weigh those options. They're going to be more familiar with you. It just lengthens that process, right?
Dan: And just the world is more distracting. The world is more distracting, right? It's just that there's more stuff going on. There's this kind of barrage of information. People have trouble.
It's funny, it’s like I was watching my wife go through this the other day. She’s trying to get a group of her friends to hang out. They're all going to hang out outside, right, just hang out and these are friends that really love each other and have been friends forever, but it's hard to get your friends to hang out with you. It's hard, because we’re like, I got the text and reply for a day because I was burned out. [38:03.0]
You have to be persistent in your follow-up, but compassionate when you understand everyone is going through some version of that. Right? I think that's really, really smart to keep in mind and I think you guys are just doing an incredible job.
I don't want to keep you too long. We're coming up on an hour. This was a really fantastic and really useful conversation. For people that want to learn a little bit more about you and about Ozarks House Buyers, is there somewhere online that they should go check you out?
Andrew: Yeah, we have our business page, Ozarks House Buyers on Facebook. I’ve got my personal page, Andrew Newlon on Facebook. Same for Instagram. I think our handle or username, whatever it's called, is @ozarkshousebuyers, and then mine is @newlon_andrew on Instagram.
Dan: Okay, I will grab these, by the way. Just if you're listening to this, all these I'm going to grab and I’m going to put in the show notes, AdWordsNerds.com/podcast. You can go find Andrew’s episode and I’ll link to that as well. It's @newlon_andrew you said on Instagram. [39:03.7]
Andrew: Yeah, that’s correct. We're also in Lubbock, Tex., too, so our company down there is 806 House Buyers, as well as the area code 806, and find us on Facebook and Instagram with that as well.
Dan: Cool. Yeah, definitely go check Andrew out. I will say Andrew, too, you’ve always been super-open and helpful. We’ve shared some mastermind stuff together and you're just a really approachable person, so anybody that wants to go check it out, OzarksHouseBuyers.com is the website. I highly recommend it. Andrew Newlon, thank you so much for coming out on the show, man. I really appreciate it. It’s been awesome.
Andrew: I appreciate the opportunity. Thank you.
Dan: And that is it for this week's episode. Look, as always, I really, really deeply appreciate you listening to this show every week—and did you know I have a Facebook group? It's totally free. It's AdWordsNerds.com/Group. Request to join. No spam, only good content. I am in there, answering questions, going live, doing all sorts of stuff every single week, and we would love to have you.
As always, this is Daniel Barrett from the AdWords Nerds team signing off. I will see you next week. Cheers. [40:10.5]
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