Many investing businesses start slowly. They inch closer to their first few deals and then generate a few leads before they carve out their own space in the market.
While this process takes years for most investors, today’s guest David Bokman has leapfrogged the journey to investing success with his company Philly Home Investor, taking his business well into 7 figures within a few years.
If building your investing business is longer than you want it to take, don’t be resigned to “that’s just the way it is.” In this episode, you’ll learn how you can do what David did and skip the waiting for success.
Show highlights include:
Can’t decide between flipping and wholesaling? Here’s how you secure yourself a high income without missing out on other deals. ([5:15])
– With the flood of investors on the market now, this strategy is underrated, but can still take you to 7 figures a year. ([6:25])
– The exact steps David took before starting his REI business and landing his first deal within 30 days. ([11:15])
– How a background in the corporate world can be your competitive advantage in REI. ([16:05])
– How doing things that don’t make you money now can build your long-term success, even if you’re a beginner. ([18:40])
To get the latest updates directly from Dan and discuss business with other real estate investors, join the REI marketing nerds Facebook group here: https://adwordsnerds.com/group
Need help with your online marketing? Jump on a FREE strategy session with our team. We’ll dive deep into your market and help you build a custom strategy for finding motivated seller leads online. Schedule for free here: https://adwordsnerds.com/strategy
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 Ad Words 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: Alright everybody, it's Daniel Barrett, I'm here with the world’s famous David Bokman. How are you man, what's going on?
David: I'm doing fabulous, but I couldn't have asked for a better intro.
Dan: That's how I intro on the show, so you know.
David: I still feel special.
Dan: You were just saying like right before we jumped on, so you just spoke at Drexel University. [0:01:05.3] So what was that about? Like why were you speaking there?
David: Yeah, so I have somebody that I know, I wouldn't say they're a friend of mine, but they're a colleague, someone that's in the real estate world that I've met recently over the last few months, and they're actually a professor at Drexel University, they teach in a real estate finance class, which to be quite honest with you I didn't even know there was such a thing, the real finance class. Super humble for him to ask me to speak, but basically part of his curriculum is to bring in people from various different areas of the real estate world and just have them talk about their background, how they got started in the area real estate that they play, and just kind of answer some questions. I was super humbled to be able to do that last week.
Dan: That's cool. Where there are a lot of people in the class?
David: Yeah, there were about 30 people, and I had quite a good amount of questions being asked afterwards, and the funny thing is that there was another speaker who spoke after me, somebody who's been in the real estate industry way in longer than me, business owner, owns a brokerage, I mean we're talking high net worth individual. [0:02:18.0] I enjoyed his story, but he had maybe two questions asked afterwards. So it felt good that I got them engaged and they were asking a lot of questions, and it was really just a humbling experience for me to be able to share my story.
Dan: You won the popular vote, I like that.
David: Apparently nobody wanted to hear about selling houses and stuff like that. I did win.
Dan: Let's take a step back. I gave you sort of the funny intro at the beginning, but for people that are listening, right, you are David Bokman just in case anybody wants to go google you after this point. You're from PhillyHomeInvestor.com. [0:03:01.1] So my usual question when I start off with doing these things is like where are you investing and why, like how did you get started. I'm going to go ahead and guess that you are in Philadelphia. Are you basically, are you like investing like in the actual city itself, are you kind of in the suburbs, like where is your basic area of business?
David: Yeah, so obviously with the name, obviously we're going out to Philadelphia. Philadelphia is a fairly large city, so there's lots of pockets, but to answer your question, my main target is the entire county of Philadelphia and also the surrounding counties, Delaware County, Montgomery County, Bucks County. So I'm in the city, and I'm also smaller pockets. There's a lot of opportunity zones, and I'm also in the suburbs, there's plenty of opportunity all over my market. I try to be everywhere as much as possible. But Philly is definitely the main area.
Dan: Cool. And about half of the AdWords Nerds team is in Bucks County for some reason, I don't know how that happened. [0:03:59.7]
David: Yeah, that's awesome to be able to work with a group that's local. That's great.
Dan: You can go to their houses and beat them up if they don't do a good job.
David: I manage the team.
Dan: Okay, so how did you get your start in investing? Let's kind of like to take a step back. Actually I'm going to step back even further. So right now what kind of investing are you doing? Are you wholesaling, flipping? What's your basic business model?
David: So right now I would say 95% of my business is wholesaling, it's a little bit different than most, I would say because not only do we focus on your typical residential houses, but we also focus on commercial properties, large multi-unit. We just closed on a 33 unit deal. Naked land and development deals, so that's 90-95% of my business is wholesaling. The other 5-10% percent I do have two flips going on, so I am actively buying if the numbers make sense, and then I also do a little bit of consultation work just given my background, which I'm happy to go over as well. [0:05:08.0]
Dan: Yeah, okay. So I want to come back to that. I was going to say like, you have the balance, and I think when I talk to investors I hear a lot of the time some variation on, "I want to do a flip when it's right and when the numbers really line up, but the rest of the stuff I just want to wholesale." It seems like that's kind of the nook that you have. You take the stuff, kind of like cherry pick deals for yourself and the rest you wholesale to other investors.
David: Yeah, absolutely. We can talk and I can touch on that when we talk about how I got involved. When I originally first got involved in real estate I thought I was going to be a flipper, like a lot of people think they're going to do, and then I really quickly realized that wholesaling is the way to go, but when I originally first got involved in real estate I was actively looking for, that was the mindset, but very, very quickly realized that wholesaling is a much better strategy. [0:06:01.6]
Dan: So break that down for me for me for your reasoning, because I feel like recently there's been a real kind of rise in competition, just kind of nationally, and it think that's kind of squeezed a lot of people in terms of what their paying per lead, you know, no matter what their marketing channel, that competition is very real. So I feel like wholesaling is kind of taken a bit of hit in popularity just because people are like, "I'm not making as much and I'm paying more for my leads." For you, like what makes wholesaling, like you said, the way to go?
David: Yeah, well right off the bat, the first thing for me is the stress and the time. So typically in my area to do a flip with just getting zoning and permits and the time, it could take potentially six months plus, and then what is the average that you're going to make on that flip. After you pay real estate agents. These are things that people don't think about, but after you pay real estate agents and your fees and your GC's made a mistake here and there, you know what are you walking away with? [0:07:06.5] 20, 30, $40,000, and that took 6 months plus and stress and time, when I can do that in 30 days. We're making on average $15-20,000 per wholesale deal, and we're doing that in an average of 21 the 30 days. So for me personally it just takes away the stress. Obviously there are still stresses with wholesaling, but the time frame is much, much shorter, and it just makes sense for me, as opposed to doing a flip.
Dan: Your market, the Philadelphia market, Philly is one of my favorite cities, but it's a pretty unique place. So do you feel like that's partially a function of your market and it's kind of like it's a right fit for the market, or do you feel like, you know, if I just pick you up and plopped you down in some random point in the United States you would gravitate towards wholesaling no matter what just because of the quality of life? [0:08:01.9]
David: I think I would gravitate towards wholesaling. So you know, just going back how I got involved into this, my background is I came from the corporate world, so I spent 10 plus years as a medical device rep. So, you know I wore the suit and tie, I drove across the entire East Coast trying to sell products. At the end of the day, I'm working for somebody else. All the travel, all the work, all the stress. That's what I thought I always wanted to do, but as I've gotten older now I have a family, I realize that's not what I want to do, so I feel like what's the direction that is going to make me the most amount of money using my skill set, and with the least amount of stress. I think if you plop me anywhere, I would probably gravitate towards wholesaling and figuring out how to make that work in any market.
Dan: Okay, I've got a bunch of questions about that, and I definitely want to come, you mentioned that you were recently on a podcast, you're doing a podcast with the focus at investor fuse, and I definitely want to come back there because I just recently, I think the episode...[ 0:09:05.2] By the time people are listening to this, I think the episode, the interview that I did with Dan Schwartz, I think I'm going to break that into 2 episodes, both of those will have been out a little bit. So remind me, I want to open that loop and come back to that. Let's talk about how you got, like what made you make the jump. Because it's one thing to know, "I don't want to work for someone else." It's one thing to know you don't love the thing that you're doing, it's another thing to really make the jump into something new, and specifically make the jump into real estate. What was driving you there, what motivated you to actually pull the trigger and make that happen?
David: Just to save on time, I really got involved in real estate by accident, it really just fell on my lap. One day my brother in law, I talked about how I was looking to do flips when I first got started. [0:09:59.6] One day my brother in law called me and he goes, "What's your credit score?" and I go, "Why?" and he goes, "Well you know, I have some money, but my credit's not that great and I'm thinking about doing some flips. Would you want to be partners with me?" So that's how it kind of got started with the whole real estate thing. And then you know, we really couldn't get any synergy going, we couldn't get anything working out, but then he started to share something about wholesaling with me and he sent me this e-book, and Dan, I'll tell you man, that e-book sat in my email bin for probably about a month or so, and normally I probably would have deleted it because it came from my brother in law.
Dan: And we already know this dude doesn't have a good credit score, so we're already, "I don't trust him."
David: Yeah, yeah. And if he's listening to this, you know, I love him to death, I've known him for 20 something years, so he's family at
this point. But the email just sat there, and I'll be quite honest with you, I don't know what drew me to the e-mail, but something did, and I started reading that e-book. [0:11:06.1] And after I finished that e-book, I'll be honest with you, something kind of just lit a little fire in me, and also at that time I knew that I was leaving my job, so you know, what was I going to do then. This whole wholesaling thing, I really understood it all, and so I started to do a little bit of research. I started to like figure out who are the players in my market, I started going to real estate networks to see the type of people that were trying to do this. Right away I just knew that I could do it better than a lot of the other people that were already doing it. So I spent that time when I still was employed kind of like just setting up my business, you know, creating a website which I made on my own on Go Daddy, you know, setting up social media accounts, creating business cards, doing all the things that you're supposed to do when you start any other business. I had a CRM on day one. I think I was already even doing a Google Ads on day one. [0:12:02.7] To answer your question, it just fell on my lap, and I really just saw that there was an opportunity, I understood it and I took action, and believe it or not, in 30 days I had my first deal and I closed it. I actually closed it on the same day that I was leaving my company. So the day that I met my boss at the time to give him all my stuff was also the same day that I went to the title company to pick up my first check. I knew I had a thing there, so I went all in. That was three years ago. My first year wholesaling was 2015, I did a total of 8 deals, I closed a total sales volume of around $800,000 dollars. Moving into year two I closed 43 deals and a total sales volume of around 9.2 million, and now we're in year three, my acquisition manager, a part time person, we should finish the year close to 60 deals closed and 10 million dollars in revenue. [0:13:09.9]
Dan: Wow. So I mean let me ask you, because you know it's interesting...
David: A lot of stuff there, right?
Dan: Yeah, yeah. It's interesting to kind of frame it this way, and I know it's not exactly, you guys weren't exactly doing the same thing. Your brother in law was the one that kind of turned you on to this, right?
Dan: But it was like you're saying like when you guys were working on together, you were having trouble kind of getting the momentum, and it seems like when you jumped into it, when you jumped into it kind of whole heartedly, you were able to make it click in a way that it wasn't happening before. I'm curious like why do you think that was? What was the difference between how you approached it now he was approaching it? You both had the same e-book. It's not like the e-book was magic. What was the missing piece there that really helped you put it together? [0:14:00.7]
David: I think it's the same thing that stops a lot of people on their tracks, they have a job and have bills to pay, and you know, a lot of people are afraid to take the chance of starting something new. I don't want to go back to all my stories, but going back to the corporate world I've had everything. I've had that six figure salary, I've had the expense report, I've had the expensive cars, I've also lost it all, but I've also tried and failed, and then you know, gone back to the corporate world to get it all again, and then tried something else again. I think that the difference between me and my brother in law at that time was he had two kids that he had bills and he was really kind of scared to try something new, whereas for me I knew I had to do something new, otherwise I would just be continuously in that cycle of getting a new job, doing great at it and then hating it or getting fired or moving on to the next one and just being in that rat race. [0:15:02.0] So I knew something had to change. So just taking that action I think is that is the biggest difference between us, and I think for most people.
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Dan: Let me ask, just from our conversation so far and I don't know a ton about this or about how you run your business specifically, something tells me that you are kind of a systems person. [0:16:00.9] Would you say that's the case?
David: Yeah, absolutely, and that was another reason that I jumped into this industry with both feet, because I saw that, for example like you know I come from the corporate world where it's standard to have business cards and marketing material and a CRM and a website, and so I brought a lot of that, which I think is standard practice in this industry, whereas a lot of people don't have that background, so the transition was really, really easy for me, if that makes sense.
Dan: It does. So I'm curious, like because I know a lot of people listening to this, just the fact of the investing world is that the vast majority of people that get started in investing are going to have trouble getting their first deal. Much less getting 40 deals. So when you look back, I mean it's interesting for you too because this is very recent. You're not like 39 million years ago when I got started in real estate investing...[0:17:00.8] This is a real recent thing. Right? You came up in same basic environment that people listening to this today are in, basically the same pools. Even today deals are much, much better. So looking back on those early days where you are getting your first million, what were the systems that you were able to implement? That can mean software, it could just mean a process within the business or even a way that you think through deals or problems, whatever. What were the systems that you put in place that made that possible for you, or made it easier for you?
David: I think the systems for me, I always try to tell people it's like building a house. And so like what do you do when you build the house? You lay the framework, you put up the walls. And so that's how I kind of treated my business from the beginning. [0:17:59.8] I created the website, created the marketing, created the different channels of marketing, whether it was through direct mail, whether it was through social media marketing or PPS or SEO, or putting myself out in newspaper or dropping off postcards. Setting up the framework and putting up the house. And my marketing budget was really, really small. I mean compared to what I'm doing now. But I say this a lot, slow and steady always kind of wins the race. I think the biggest thing for me was my mindset. I knew that the things that I was putting in place weren't going to make me any money in the next 30, 60, 90 days, they were going to make me money in month five, six, seven, eight. So I was setting up my business with a long term vision. When you're setting up your business, if you have bills to pay in the next 30 days and you're stressed out you're going to be making different type of decision versus planning for the long haul. [0:19:03.1] So I think for me, setting up all those things in the beginning, having the CRM, having my follow up processes, having all my social media accounts, having all that stuff in the beginning was much easier than having to do all that stuff now. Now I can just kind of slowly light fuel to the fire as I grow. Which I have been. Every month, every quarter, every year I have all these systems and processes in place, and now I'm just fine tuning them as I go. I think having all of that stuff in the beginning was absolutely critical.
Dan: Yeah. and I think something that you just said is absolutely huge which is having the time horizon where you are making the decisions that you're going to have a huge impact on you long term, right? And doing the things that don't necessarily have the immediate return on investment, or they don't have a huge immediate return on investment, but you know it's like if I try to build this after I'm already going it's going to kind of be too. Right? [0:20:06.8]
David: Yeah, yeah, absolutely. I think also just coming from my corporate background, you know I would say coming from the background I came from, most of my colleagues, I'll share with everybody, I'm 39 years old, but most of my colleagues when I was in my corporate world when I was a my early 20's, early 30's, most of the people I work with were in their 40's, 50's and 60's. So they had been doing this for a long time, and they had their own systems. Good luck trying to get them to change, and that kind of how I viewed the people that are doing investing. A lot of the guys that have been doing this for a long, time they've got you know Stone Age method that they're still doing. Or the guys who say that PPC or SEO doesn't work when they've only tried it for a month or two. I kind of had that background and that knowledge, and that was another reason that kind of gave fuel to the fire for me. I was kind of on to something. [0:21:01.8]
Dan: It's one of those things, right, where the deeper you are inside a system, the less likely you are to actually understand when that system changes. The more entrenched you are in it, the harder it is to like a bit. Let's talk marketing, stuff because it's the REI Marketing Nerds podcast after all, and I'm just really curious. You mention, let's talk about kind of where you got started and then where you're at now. You mentioned when you get started you didn't have much of a budget. So what was your initial kind of marketing push like? How did you go out and think through the problem of getting clients? You started with direct mail, did you start online? How did you think through starting that process?
David: Yeah, absolutely. I always knew that... For me from day one I went all in on internet, online, technology. What I mean by that is simply that you want to be everywhere. We're living in the age of technology, and so I wanted to make sure that I set all that up in the beginning. [0:22:04.5] But to answer your question, I did a little bit of everything. I did direct mail in very small batches, but I did it every single month. I was writing letters myself which I was doing in the beginning, I was writing 10 to 20 letters a day myself, as well as paying for letters to go out. I did mention to you that I was doing Google PPC, any Facebook ad from the very beginning, but honestly I was paying like $5 a day, $10 a day, but I was doing them, I was trying out newspaper ads, I did Val Pak. I don't know if you know what those are.
Dan: Did that work at all? I never met an investor who actually does that.
David: I don't think I did it long enough, and I didn't really track it well to know how well that it worked. I will tell you that it was extremely cheap, so for the cost of it and for the amount of exposure, it's probably worth it, but I don't know if I actually got any deals from it. [0:23:04.2] In the beginning I was doing everything myself. I was going to networking events, like I said, putting myself in the paper, trying different things, but trying everything because I feel that you can just have one type of marketing source, because what happens when that dries up? But I was spending maybe anywhere from $4-500 a month on marketing. As I started to close deals that would slowly go up every quarter. So every quarter I would evaluate my marketing and then start to increase my, let's say PPC budget from $10 a day to $15 a day. To where we are today, which is, I think we're spending total of $15000 a month. So a big difference from year one, but it took three years for that ramp up. And I'm certainly not doing anything special or magical, I'm just following the instructions that you're supposed to do and just, you know, just being consistent with it, but we're doing all kinds of marketing. [0:24:06.6] Things that I don't do is I don't feel do bandit signs, not that I think they don't work, I think they do work, it's just that's not the way that I want to represent my company, so we won't do things like that, but I pretty much do everything else. I utilize LinkedIn, Bigger Pocket, all the free resources, and then I'll pay for the rest. Facebook, Google, direct mail, but I would say 90% of my strategy is geared towards being online. I have multiple websites, I do the blog, do SEO, so I'm all in for internet strategy moving forward.
Dan: So that kind of brings me to my next question, which is what's working for you now, and I'm especially curious about what you see as something that's coming up or something that's improving or increasing in importance. [0:24:59.1] You talked about like people kind of like, their stone age methods, but world moves really fast, and I've talked about this on this podcast before, where it's like, you know, I started doing this whatever it was, seven years ago, and AdWords was the only thing we needed, and we've had to continuously up our game, learn new channels, learn new things. I mean it's never ending. So for you, what do you feel like is your kind of bread and butter now, and do you feel like things are changing, do you see anything on the horizon coming up that you think is important or can be more important?
David: For me 90% of my deals in the in all come from online generation, so everything is coming from that mainly, but I don't really see that changing. I do see technology being more of a play moving forward. Going back to that talk that I did at Drexel University, the other person that spoke had an opportunity to be in a meeting with Gary Keller. [0:25:59.3] I'm sure everyone knows Keller Williams real estate agency. They talk a lot about, and he shared some of this with us, he talked a lot about how the real estate world is doing a lot to disrupt kind of the investment world with technology and things that they're going to be offering. Kind of creating one stop shop moving forward. I definitely see that moving forward that there has to be a partnership with other brokerages or other agents, or some type of leverage with technology. I don't know if I could answer that question, I still feel like I'm a newbie myself in this world and I'm learning a lot as I go, but I'm fairly confident that whichever direction we move into is definitely going to be in the realm of technology and who has the most leverage and who can provide the best service honestly. I think a lot of other brokerages and investors will not be able to compete in that marketplace. [0:27:02.1]
Dan: I think was Dan Schwartz, I think in our interview is talking about investing is really moving into the age of systems, where you know, people have a system that can extract incremental value. If your system extract .5 units of value more than mine, over time you're just going to eat me alive. It may seem small, but I think the destructive force of Zillow instant offers, Open Door and all these companies, they're banking on that system's process to kind of make up the difference. I'm really curious what's going to happen, I think you're absolutely right that technology is going to be huge. I mean also just think that like there's going to be a space that opens up for people who invests a lot in that person to person relationship. Where it's like a real much higher touch process. I don't know, it'll be really interesting to see kind of where it all shakes out. [0:28:02.9] Well listen David, if people want to follow up with you and kind of learn more about you because you're doing a lot of really interesting stuff, like where is the best place for them to find you online or learn a little bit more about PhillyHomeInvestor.com?
David: The best place for people to follow up about me, learn about me or contact me, I actually have another website, you can just go to BokmanInvestmentGroup.com, and that will tell you a little bit about me, the things that we do, all my companies, and it also links to all my different social media accounts, and as well as my personal email, I believe, at the bottom of it.
Dan: Cool, man. So everybody, if you're... I know a lot of people are like driving or, I don't know. I always picture like people in the shower, but I think it's hard to listen to the podcast in a shower.
David: I just went on Amazon.com and the first thing that popped out was a shower speaker, so apparently it's something that I need to get, I don't know. [0:29:02.6]
Dan: We must be on the same retargeting list or something, because I thought about it. I'm already like, I have so little time in my day where I'm not trying to cram some kind of thing in, you know, and I might, "Maybe just..." So for people who want to catch up with David, so that's BokmanInvestmentGroup.com, and you guys, if you're listening to this, BokmanInvestmentGroup.com. And obviously there's PhillyHomeInvestor.com, which is one of David's websites where he's doing his investment in Philly buying houses and all that good stuff.
David, this was awesome man, thank you so much for coming on and sharing your knowledge. I couldn't be happier for you man, sounds like you're crushing it, and well deserved. I really appreciate you sharing that with our listeners.
David: I appreciate you having me on, and hopefully I will be able to provide some value, and hopefully somebody gets something out of it. So thank you for having me on, and I'm super humbled as well. [0:30:01.6]
Dan: Yeah, absolutely, man. I'm glad we can be, probably not the last stop on your whirlwind media tour on all these different podcasts. I'm coming up on time, which is why I have to kind of shut it down, but would you be open to kind of coming back for another episode? I want to dig a little bit deeper on some system stuff, we didn't have a ton of time. Would you be open to come back if people are into that?
David: Yeah man, absolutely, I would love to share more. I know we didn't have a lot of time, but I would love to be able to come back and share more info.
Dan: Alright guys, well thanks again, and that was David Bokman from PhillyHomeInvestor.com and BokmanInvestmentGroup.com. David, have an awesome rest of your day, man.
David: Thank you Dan, thanks again, man.
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