If you’re listening to this podcast, you’re committed to building your dream life and business as a real estate investor.
You’re learning from the best in the field, constantly getting more knowledge and working on closing more deals.
But all of this is meaningless if you “die” along the way and ruin your business.
And not dying is much harder than it sounds, because some tricky problems are lurking out there, ready to bankrupt you and your business.
If you don’t want your business and dreams to die, do what you’ll hear about in this episode and be on the safe side.
Show highlights include:
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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 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. Hello everybody and welcome to this week's REI Marketing Nerds podcast. As always, this is Daniel Barrett here from AdwordsNerds.com. How are you? I hope you're having an awesome week. I am tiny bit raspy this week, a little bit better than maybe my last few podcasts. Sooner or later, I'll have my voice 100% back. [0:01:02.6]
I'm sure that will happen. But, this week I wanted to talk about something. I was thinking about topics to talk about. You know, I had a couple of things in the queue, a couple of things I knew I wanted to talk about and it just occurred to me that, you know, as always if I want this podcast to have the absolute biggest impact on you and your business, I need to sometimes shy away from maybe the more immediate tactical stuff and I need to focus on the stuff that really makes a huge difference. And a lot of the times, that's how you think about this kind of marketing, how you think about online marketing for motivated sellers in particular. And something that is I think very often overlooked by real estate investors and a really good way for you to differentiate from your competition is this idea of how not to die. [0:02:02.2]
And how not to die is essentially what I call making sure that we account for the potential downside. Right? It's like my friend Nick oftentimes will call this you know it's not stepping heavier on the gas. It's taking your foot off the brake, and I think a lot of us in our businesses, we you know we're struggling for the results that we want. We're struggling to achieve our goals. We're struggling to hit our revenue numbers. Whatever it is. And the whole time we have got our foot on the brake. We're doing things that we know aren't optimal. You know, it's like getting enough sleep is a good example of this, right. It's like if you are struggling in your business and you're struggling to hit your goals and you're struggling to do all the things that you need to do and you're getting three hours of sleep a night, well chances are you know, you know that getting a solid 7-8 hours every single night can have a massive impact on your health and your quality of life and the way that you think and how productive you are and how successful you are. [0:03:11.7]
But we're always tempted to look for the more proactive thing, the thing we can actively do, so it's like the new marketing channel and the new marketing method or the new tactic or whatever it is. And all the while, we just kind of leave our foot on the brake and wonder why we can't go as fast as we want. So this week is all about taking our foot off the brake. It's about not saying, "How can I hit every single goal I need to hit?" Instead, it's saying, "How do I not die before I get there?" and there are three major things I think come up, specifically for online marketing in this kind of realm. Okay? Things that I know for a fact everybody does and I know for a fact are going to prevent you from hitting the goals that you have, that are going to make sure that you get less deals than you could have. [0:04:10.8]
These are real pragmatic things that are going to have a pretty much immediate impact. So, it's not woo woo here. We're talking about things that you can do right away that make sure that you get to your goals a lot more quickly and a lot more happily. So, let's dig into this. Number one: Look at the numbers, but not too much. Okay. So, online marketing and stats, numbers, metrics. They have kind of a weird relationship to the real estate investor. One of the best things about online marketing is the fact that it produces a lot of really objective data and it can do that really quickly. So if you compare that to let's say like doing a direct mail campaign, you know if you're going to split test that campaign. [0:05:00.8 ]
You've got to send out those two pieces of mail. You've got to have like two different phone numbers and all that different stuff. And you've got to send it out and you've got to wait for it to come back and you know, it's just, it takes a lot of time whereas split testing, let's say an ad on Facebook or an ad on Google Adwords, you can think of it, launch it very quickly, get it onto the market almost immediately and get very concrete data right away. How many people clicked on it? How many people liked it? How many people engaged with it? How many leads did it produce? How many deals did it produce? You can get all this data back in a very concrete way, very, very quickly. And that's amazing. Right? That's amazing. It's one of the things that produces such great results for online marketing. It's one of the reasons that it's my favorite type of marketing, but knowing that and understanding that just because that is the case does not mean we want to be engaging with our online marketing numbers every single minute of every day. [0:06:10.1]
Well those are two very different things. And it's this sort of loophole of human psychology, that we tend to feel the pain of our losses more intensely than we feel the pleasure of our wins. Essentially what that means is if you are paying a lot of attention to every up and every down that your campaign has, that your marketing has, or whatever, you're going to be miserable even if you're making money most of the time. And in fact, this is a real world, real life thing for us at Adwords Nerds. We have had clients do -- we had a client, this is literally true. We had a client come on, do PPC, and if this client is listening to this, you know who you are. I had a client come on, do PPC. They signed up for 90 days, so they're doing three months. In three months, they did seven deals. They did seven deals. [0:07:06.3]
I think it was like a 5-7 times return on their investment, and at the end of those 90 days, this person was like, "Well, I don't know if I want to keep going." You know, if I said, "Look, give me your 401K and I'm going to get you 5-7 times your investment in 90 days," everybody on earth would do that. Right? This is literally a no-brainer. You put $1 in the machine and you get $5-7 out. Right? It's basic math. It's pretty amazing. And I'm not saying this is average results, because it isn't. This was above average result for sure. This person crushed it, and at the end he wasn’t sure if he wanted to keep doing it. Well, why is that? That's, you know, objectively, I think if like we're talking about this now, I'm just telling you this, you know that's an irrational decision. Of course, you're supposed to just keep doing that. [0:08:03.1]
But like why was he unsure? Well, he was unsure because, you know he saw a bunch of days where like money went out and nothing came in. And he saw a bunch of days or he saw like whole week sometimes where he wasn’t getting any leads and he saw like the big, you know, expense of paying for the ads and you got to pay for the team and all that stuff. Right? And he felt the losses more intensely than he felt the gains. So it's like spending the money on the ads felt worse to him than getting the money from the deals, even though he made 5-7 times more on the deals than he spent on the ads. And this is one of those things where if you just think that you're going to get into online marketing and the numbers are just going to be what they are and you're going to be consistent and it's going to be just awesome all the time, well, you're going to be in for a rough ride. Because online marketing is a market. It's a market, like the stock market or the housing market. [0:09:03.5]
Right? We know that in general the stock market goes up over time. Right? Stock market has been a great investment over the however many years the stock market has been around, and it's probably going to keep increasing and improving and providing you great return over time, but that's if you look at like 10-50 year periods. If you look at the individual days, well the stock market is all over the place. Some years, it's in the garbage. Right? Some years it is amazing. And online marketing is the same way. You can have an incredibly profitable account that generates dozens of deals a year at a very hefty profit, but if you look at it day-to-day or even week-to-week or month-to-month, sometimes it's going to look terrible and sometimes it's going to look amazing. So the key here is that we want to know our numbers. We want to look at our numbers. We have to look at the numbers, but we don't want to look too much. I schedule it, personally, like twice a month is when I check on my own marketing numbers. For you, it might be once a week. [0:10:01.0]
It might be once a month. It might be once a quarter. I don't know. But we want to schedule it and set a time of the week we check our numbers. We know our numbers but we don’t obsess about them every single day, because we know if we do that, we're going to make ourselves miserable, even if we're making money over time. So that's how not to die, trick number one. Look at your numbers, but not too much.
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Dan: Alright. How not to die trick number two. Know where your breakeven point is. This is really critical because online marketing systems, if you're looking at SEO or PPC or really any of these systems, right, they tend to start relatively inefficiently. So when you start, you don’t really know it's working. You don’t really know what your bid strategy is going to be. You don’t know what key words or ads or landing pages you're going to settle on. I mean, it doesn’t matter. I mean, you know, we have done this so many times, hundreds of times by now, in pretty much every single market in the United States and we still don’t know exactly what we're going to see every time that we launch. Right? Everything is changing all the time. Constant change is the norm. So you never know what you're going to get, so you always end up starting at a relatively inefficient spot and then hopefully getting better over time if you're working on it, you got someone working on it for you. You're testing things. You're optimizing things. Like it should be continuously getting better at least when you look at the overall trend line. [0:12:03.7]
Right? And you can think about trick number one, where we're talking about looking at our numbers but not too much, right. Over the course of a year, we should see substantial improvement, even if like day-to-day, we're going up and down. So, when you start, you're not as good as you're going to end up. The problem that a lot of people make is they look at where they start and they say like, "Oh, this isn't where I needed to be," and then they quit. And so they end up spending the money early on and not staying in the game long enough to actually recoup their investment by seeing the improvement. Right? Just sort of like going to the gym for a week and saying, "Well, I don’t have the muscles that I want. I'm going to stop working out. This is a waste of time." And obviously it doesn’t work like that. Right? But then if you're in this situation where you're like, "Look, okay. I know I'm going to get better, but like how do I judge my performance?" Typically what I'll look at is what I call the breakeven number, and this is saying like literally if all I wanted to do is break even, how much could I spend? [0:13:00.4]
Let's say you spend about -- or let's say you make about $10,000 per deal. Alright? You're wholesaling. You make about 10K on a given deal. Alright? And let's say you close about one out of every 10 leads. Okay? So, what can you spend per lead and just break even? Well in that case, if you're making $10,000, right, and you close one out of every 10 leads, you can actually pay $1000 a lead and still break even. You're not losing any money if you're paying $1000 a lead. Anything below $1000 a lead, you are making money. Right? If you close one out of every 20 leads, well that's 500, so you're like, "Alright. I closed 1 out of every 20 leads. That means I can pay $500 a lead and still break even. I'm not losing any money as long as I'm paying less than $500 a lead." And so let's say you start off in Adwords and things are very bad and you're paying $300 a lead, which is a lot for that market right now. Right? [0:14:01.4]
So you're paying a lot per lead, like way more than you should. You're paying $300 a lead. Well, you're still making money. You know, if your numbers are correct, if you're closing roughly one out of every 20, then you're going to break even at $500, that means at $300, you are making a profit. Now, it may not be what you want, and it may not be enough to keep you in the market, but at least you know you are making money. And not understanding this number and not understanding how much room you have to spend money on this system and still be profitable is one major reason that like I said, people drop out before they actually get to the point where they're efficient. So they go to the gym for a week and they say, "I don’t have the muscles that I need," and they stop going. Little do they realize that if they just kept working at it, they would’ve gotten better and better every single time they went. Right? Every single time they went and lifted some weights, they would’ve gotten stronger and stronger, and eventually they would get where they need to go. [0:14:59.6]
So it's this misunderstanding of saying like, "Well how much room do I have to still be profitable," and misunderstanding that hey, this is a system that gets more efficient over time, drives people out of the market early, ends up costing investors a lot of money. So that's how not to die trick number two: Know your breakeven number. Final way not to die is to trust the trustworthy. Now, anytime I talk about trusting anyone with your marketing, I feel a pang of self-consciousness because clearly I run a business where I do marketing for real estate investors and I ask my clients to trust me all the time, whether they're service clients or coaching students or they're attending a boot camp or whatever it is. So, clearly, take this with a grain of salt because any time anybody says anything, you want to take it with a grain of salt. Of course, I have an incentive for telling you to trust someone with your marketing, but I will put my money where my mouth is. [0:16:04.1]
I hire people to do my own marketing. I hire, I should say I work with, a full-time Facebook Ads person that does our ads on Facebook and recently even doubled the amount of pay that I pay them in order to have them do even more work with us. I, in fact, hired my own SEO team. So the SEO team that I use that does all the work for us for real estate investors, you know, Patty Dalessio, Jeremiah Rizzo, fulltime amazing SEO people on our team, I paid them separately. So I paid them my own money in order to have them do SEO for Adwords Nerds. Now, here's the thing -- I could run my own Facebook Ads and I could do my own SEO. I know these things relatively well. I know, you know, I've done SEO professionally for about 10 years now. [0:17:02.6]
Same thing for about pay per click, maybe a little bit less than that. and these are things I'm very familiar with and I know more about Adwords Nerds than anybody and I know more about our market than anybody, and I'm in the best position to do this work, and I still pay them a lot of money to do this. Why is that? Well, the fact of the matter is is that the closer you are to it, the less objective you can be. And generally the worse the decisions you're going to make are. And when it comes right down to it, when it comes down to making sure that I can focus on the things that only I can do, I just can't do all our marketing and do those things at the same time. That's not what focus means. Right? So, I trust trustworthy people. Now the question becomes how do you know who is trustworthy, especially online. Right? Especially online. There's a lot of people, a lot of competing theories. A lot of people who think this way is the best or that way is the best, and a lot of people make a lot of claims. [0:18:06.1]
So, how do you know who to trust? Well, I have a couple of major kind of filters I pass everyone through. The first is just experience. Have you helped someone in this industry who does what I do get to the goal that I'm trying to get to. The Facebook Ads person that I hired recently is the person that works with similar funnels that we use, has worked in similar industries with people that I know and trust, and has really good reputation. So I can go to their references and say, "How did this person do," and they came very highly recommended. Now do I know if it's going to work out? No. So the next thing that I do is I typically work for a period of time that's long enough to see results, but not forever. So, I will set up a project, this ads person for example, I work with them for three months. That's our contract. It's for three months. Why three months? [0:19:01.0]
Well, three months is enough time for me to see how they're going to work, for them to get things going, for them to start to see some results, for them to start to be able to change the numbers. And I can get a sense of both how responsive they are, you know how they work with me, do I like their basic process. Right? But I'm not married to this person forever, and at the end of those three months, if I don’t see at least movement towards a positive result, then I'm not going to keep working with them. And then finally, the way I think through this is, I think about the claims that they make. And if they make really dramatic claims, that's actually a red flag to me. Anybody that's worth their salt in online marketing should try to express to the potential client the chaos of the online marketplace, the danger of potentially losing money, the fact that hey, no matter how good you are, nobody knows 100% what to expect ahead of time. That's just reality. And the people who pretend that that's not the case, to me, it's not necessarily that I think they're being dishonest. To me, what it means is oh, you're over confident in your own abilities. [0:20:07.5]
That means you actually don’t have as much experience as you think you do because experience in this kind of marketplace always teaches us to be humble. Right? Hubris is a real thing. And hubris is a dangerous thing for someone who is managing your money and your business. So this is the third trick for how not to die. You trust the trustworthy and don’t try to do everything yourself. And if you can do these things, well hey, if you just focus on not making the big mistakes that everybody makes and if you just focus on taking your foot off the gas, it turns out you do a lot better and go a lot faster than everyone else and it's not even going to look like you're trying particularly hard, which is a pretty awesome and powerful place to be. Alright everyone, I hope this week was useful to you. I hope you got some value out of it. I know I had a lot of fun talking about it, and hey, if you are not in our free Facebook group, you should come and check it out. [0:21:04.2]
You can get there at AdwordsNerds.com/group. That's AdwordsNerds.com/group. Swing in and say hello. I'd love to hear from you, and I'm posting in there every single week, including all sorts of in-depth trainings and new tools and live videos and sharing content and all sorts of cool stuff, plus there's a lot of other really awesome real estate investors sharing what works for them, asking questions, all sorts of cool stuff. So jump in there. That's AdwordsNerds.com/group or just go on Facebook and type in REI Marketing Nerds, and you'll find it. Alright everybody. Have an awesome rest of your week, and I will talk to you soon. Cheers.
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