Episode #63 – BIG FISH, small pond: Stop Losing Deals & Beat Everyone to the Seller’s Door – Welcome

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.

Alright, hello everybody. Welcome to this week's episode of the REI Marketing Nerds podcast. As always, this is Daniel Barrett, here from AdWordsNerds.com, and I want to get straight into this week because for the next few weeks, we are doing a very special series. The audio from the podcast this week and for the next few weeks is going to be from a series of video trainings that I did that's called "Big Fish, Small Pond. Stop Losing Deals and Beat Everyone To the Seller's Door." [0:01:13.8]

This was a multiday, in-depth training I did with a very small group of investors all about how you can stop losing deals, even when your market is being invaded by i-buyers and a million different investors - how you can stop losing those deals, get to the sellers first by using this strategy I'm calling the Big Fish, Small Pond Strategy. This is going to be a multi video series and this is going to be a multi podcast series. So if this is, you know, the third one or the fourth one or whatever, go back and find the first one and listen to it. If you're lucky enough, this is just the first one. Watch out for it each week. These are going to be very, very special. I mean, this was a really high quality training that we did. I'm extremely proud of it and I can't wait for you to check it out. So without any further ado, let's get into the Big Fish, Small Pond training series. [0:02:07.2]

Dan: Alright. Hello everybody and welcome to the group. This is Dan Barrett from AdWords Nerds. I'm the handsome guy over there on the far right hand side and I am so excited to have you join us in the Big Fish, Small Pond group. So the reason we are all getting together is because I have noticed more and more investors are now on an income roller coaster ride than ever before, and what I mean by that is we have got investors that are closing, you know, a deal one month and then they're going 2-3 months without closing another one. They're dropping thousands of dollars every month on marketing, only to find themselves standing last in line to make the seller an offer because there are like 20 or 30 other investors who beat them to the punch. When they do get in front of sellers, a lot of them are asking for close to retail value. So the lead sources that used to work are now drying up and people are scrambling to find a way to consistently fill up their CRM with motivated sellers. [0:03:05.9]

We've got investors literally working 40+ hour weeks, missing dinners with the family and sacrificing their health all to keep their business from sinking. But I'm telling you that all stops today because over the next several days, I'm going to show you how some investors are going from roller coaster income to consistent stream of checks hitting their bank account every week, even with everything happening in the market right now. Now if you don’t me, if this is the first time that like we have connected - first of all, I appreciate it. I'm going to tell you a little bit about my background so you know why you should be listening to me. You can see my shiny head and my cool youngest son there over in the picture. So I kind of come from like a weird background. I was originally trained to be a high school history teacher, so my Master degree is actually in education and I got a Master degree in history, but that whole time I was playing in bands. I was doing music and I was always the one that was making shirts and making websites for the band and all that. So I was basically teaching myself online marketing to promote my music. [0:04:03.6]

Now after getting some good results for myself, other people started to notice that and started asking for my help and that's how I got into the business. So I eventually, I kind of, I started doing web design. I started doing SEO and I made a lot more money doing that just kind of part time than I was making being a teacher so I made the decision to go full time and start my agency. So fast forward to today, and AdWords Nerds has worked with over 1100 real estate investors. That number still blows my mind, by the way. We are the largest Google Partner Agency in the US that specializes in helping investors turn leads and clicks into signed contracts. We manage over $5,000,000 a year in client ads and we generate thousands of leads every month for our clients and we have the largest library in the entire industry of split task for ads and landing pages and all that stuff. So basically, we know what works online and what doesn't. We have more data to back that up than literally anybody. [0:05:01.3]

So we have worked with people like Joe McCall, Alex Youngblood, Tom Kroll, 1800 Fair Offer, OnCarrot, InvestorFuse and so many more - REIBlackBook. We have got clients basically everywhere in the US, from Las Vegas to Jacksonville, Florida. So the only reason I am telling you this is because I know a thing or two when it comes to filling up a CRM every day with motivated seller leads and I want you to know that so that you listen to what I'm about to say because the real estate investing market is changing, and not only is it changing a little bit, there are massive, seismic changes that you need to know about. In fact, I call them the "Four Horsemen of the Real Estate Investing Apocalypse." Just say, looking at this picture that I chose, I didn't expect these guys to look so cool. They look super awesome. They're supposed to be scary. I really like the guy in the middle here. He's my favorite. Anyways, so the four horsemen. Let's talk about these. [0:06:01.9]

So the first thing you need to know - what's happening in the real estate investing world right now. I-buyers are coming in. This is incredibly disruptive. We have got greedy i-buyers like Zillow Open Door and Offer Pad. They are spending billions of dollars gobbling up ugly houses that they can chew on. This is serious. Zillow alone is on pace to buy a flip 5000 homes per month, which essentially is like building a small town every single month. That's one of these companies. These are venture-backed companies and I've got to tell you - these companies don’t care if they make money. Literally, right now they are losing money. They don’t care. So that is incredibly disruptive to the sort of traditional REI market that you and I are used to. Second thing - traditional deal sources are in decline. So you've got REOs, short sales, foreclosures - those are harder to find than finding a needle in a haystack and basically, giant hedge funds and big real estate players are just fighting it out for these kind of traditional deal sources and putting everybody in this bloody bidding war where nobody is making any money. Right? [0:07:11.0]

The third factor is that there's just more competition. If you look at Google search trends, searches for the words like real estate investing and real estate investor training are higher now than at any point in human history. We have more new investors coming into the market now than ever before. We can just look at the popularity of flipping shows on HGTV. Right? Basically everybody thinks they can be a real estate investor. They're all flooding into the market. It's one of the reasons that if you look at like coaches for real estate investors, that business has never been stronger. We have more people coming into the market now than ever before, which is pretty wild. And then on top of that, on top of all that, you have housing prices going up. So there is less and less meat on every single bone. There's less and less profit margin for every single deal and you have more and more people competing for those deals. [0:08:06.7]

So all that basically means less deals to go around and less meat on the bone when you actually get to it. Basically, every investor I talk to says the exact same thing. They say they have a good month where they land a couple of contracts and then they have a couple of months where they plunge deep into the red and their lead flow is drier than the Sahara Desert. Right? You have this like boom and bust cycle. It's really, really intense and it's extremely hard to make it in today's real estate investing world. That is just the reality. So why does this keep happening? Okay - why does this keep happening? Well, it is in essential, if you look at the underlying causes, it's actually pretty simple. Right? As competition crams into the market, investors are not the first in line on the seller's doorstep. Right? Competition is beating them to the door bell. They're standing way in back when it's time to actually put in their deal. [0:09:02.1]

So essentially, they're getting in front of sellers who want full retail for their house and are not in a hurry to sell and when they send letters - send direct mail, send yellow letters - it's always just throw them on top of a giant stack of letters that are all exactly the same. When you cold call - you can tell me if this happens to you - if you cold call someone, you hear, "You're the third person who called me today." Right? And at that point, they're like so angry, they're going to tell you to go to hell. Right? Pardon my French. Right? So all of this is basically like a fish trying to swim and feed next to sharks in the ocean. Sooner or later, you are going to be the next meal, but here's where we're going to use this metaphor to get to somewhere where we're actually going to see the upside of this. Because what if you could switch and stop swimming in the shark infested waters and go to a small pond where you would be the biggest fish around? Because it's much easier. Right? It's much easier to move to a small pond than it is to become the big fish. Think about that. Right? [0:10:06.5]
It's a lot easier to move to the small pond than it is to become the big fish. Alright. We call this Big Fish, Small Pond marketing. So let's get into exactly what I mean. Alright?

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Dan: To be the first investor that sellers call, you have to target sellers in a small and targeted area. You have to create a local monopoly for yourself. So by creating your own small pond, you're going to be the biggest fish and you can monopolize your local marketplace when you build a local monopoly, you're the first investor that pops into sellers' minds when they want to sell. [0:11:18.5]

This is a huge point. Okay? You are the first person to pop into their mind when they want to sell because after all, people like to sell to people and not big corporations. Everyone wants to deal with someone that they know, like, and trust. So who do you trust more - right? A random guy in a briefcase, rushing into your yard or your neighbor? Right? You see them every day. They may live next to you. You trust them more. Right? It's just you've got experience with them. Of course you're going to trust them more than the guy who like pulls up in the Beemer and like rushes out with the brief case. Right? Of course, unless you have Donald Trump's budget, you can flush money into campaigns that reach everyone. Right? You want to spend your ad money wisely. You want to get to sellers who want to sell today. Right? So you want to focus on people who are motivated to sell now. [0:12:05.4]

The way that you do that is by going online because frankly, people online are more motivated. They're trying to solve a problem, like immediately, in that moment. Alright? Now here's what I mean by this. You can kind of think about it this way. If you divide the market of people that are selling their homes into levels, right, you're going to see there are different levels of sellers. Right? Level one are sellers who simply know they don’t want to sell. They are absolutely sure they do not want to sell their house. Whatever you say to them, you're just going to turn them off. This is about 30% of the market. Right? There's just nothing you can really do for these people. Now level two are sellers who think they don’t want to sell. Right? You need to convince them. You need to twist their arm. You need to agitate them somehow. Right? But they could sell if you could sell it hard enough, they might sell, but they think they don’t want to. That's about another 30% of the market. Right? [0:13:01.8]

Now level three are sellers who aren’t thinking about selling right now but maybe some time in the future. Right? They're open to selling but they're not thinking about it right now. It's not a priority in their minds. That's about another 30% of the market. So that's 90% of the market right there. Level four sellers, they're open to sell. They don’t have a bleeding neck problem, meaning they're not 100% motivated, but they're open to it. It's the right time for them. They want to sell. That's about 6% of the market. Then finally, level five sellers are distressed. They are desperate. They want to sell right away. Okay - that's 3% of the market. Right? The problem with the way that most investors market themselves is that they target the bottom three levels - level one, level two, level three - and they're basically flushing their money down the drain because they're marketing to people that don’t want to sell. Right? The way that we make this work is by targeting the top levels of sellers - level four and level five. You want to focus on these people because when sellers search online, when they're going online and they're typing in sell my house fast, that's when they're at level four and above and they are ready to sell. [0:14:14.6]

That's why they're engaged in that activity. Right? Like, I've never searched for sell my house fast online just for my own house because I'm not ready to sell. If I was, I might do that. So instead of them asking for references and like haggling or even yelling and like screaming at you and saying why are you sending me this - they're saying, when can you make me an offer. Right? That's a pretty big deal. Wouldn’t you want that kind of sellers? Wouldn’t you want those kinds of leads? Well to have sellers coming to you, to have those top levels of sellers - level four and level five - the people that are actually motivated - how do you get those people to come to you? You hit them multiple times. To be the first person that pops into their mind… think about Coca Cola. Right? If I say cola, you're going to think Coca Cola without even trying to do it. [0:15:09.2]

It's going to be the first association that pops into your mind. Why? Because Coca Cola has marketed to you hundreds of thousands of times in your lifetime. Really, really smart investor that I was in a mastermind said to me, "Coca Cola never cold called anybody because they don’t need to." Right? When you think about cola, you think about Coca Cola. In fact, most people, they call cola Coke. Right? That's a pretty strong brand. So when you go on Google, right, when you go on Google, when you get into the search engine, you're getting in front of them, in that moment, in that moment and becoming the person that they think of. So why Google? I've mentioned Google a couple of times. Why am I talking about Google and not talking about Facebook or whatever? Well, the fastest way to start reaching sellers online and consistently getting deals out of those leads is to go on Google. [0:16:03.0]

So first, it's just a huge channel. There are 3.5 billion searches every day on Google. Every day. Okay? So this is like the famous Wayne Gretsky quote, where he says, "You don’t go where the puck was. You go where the puck is going to be." Okay? Now we don’t go where the leads were, which is yellow letters, bandit signs, direct mail - right - cold calling. We go where they are going to be, right now, today. If someone has a problem, where are they going to be? They are going to be online. Right? They are going to go to Google. If you have a problem and you need to figure something out, where do you go? You go to Google. You want them in that moment that they are trying to solve the problem, where they go online and they're typing in sell my house fast or whatever it is. You want to get in front of them first. It's incredibly high level of control as a channel and in terms of impressions and in terms of people getting to actually see your marketing materials, it's significantly cheaper than a lot of other markets. If you think about a direct mail piece can easily set you back $1 to $2 per piece whereas the cost per impression on online advertising can be anywhere from like 4 cents to $1. Alright? [0:17:17.0]

So there's a lot to recommend that channel. Now here's the thing. Google Ads, even though it's the place where we start and it's the most powerful channel, these are the seeds. Okay? The seeds produce plants but the thing that people forget is that plants, you know, the seeds produce plants, but plants produce more seeds, and we're not going to stop with Google Ads. We're not going to stop here. Right? We're not going to rely on a single channel. What we're going to do is we're going to generate leads via this channel, but then we're going to take those leads and we're going to give them to Zuckerberg over at Facebook and we're going to tell him to give us more of those leads and we're going to repeat that process. So that way, the leads are way cheaper and we gain access and tap into what I call hidden leads. [0:18:03.6]

No matter how competitive, in every market there are hidden leads. Those are leads that want to sell but haven’t done any research and haven’t been reached by investors yet. Now if you can imagine what will happen to your business if you can get in front of people when they want to sell but they haven’t even started that process - that is an incredibly powerful place to be. Now I don’t know about you, but I'm super excited about this. Alright? In the upcoming videos, I'm going to be showing you how to launch your first ad in less than 60 minutes and how to get your first lead from Google Ads. This is going to be a hopefully life-changing and certainly business-changing process. I'm super excited to go through it with you and I will see you in the next couple of videos.

Thanks for checking out the Big Fish, Small Pond training series for this week. If you want to get the whole rest of this series, either look before or after this one, depending on which one you're listening to, to go get the rest of them. They are very high quality and I hope you enjoyed it. Now if you are curious about the Big Fish, Small Pond training series and you want to get plugged into that, you want to get the videos, you want to ask about whatever programs we have, just drop me an email at danbarrettvip@gmail.com. That's d-a-n-b-a-r-r-e-t-t-v-i-p@gmail.com. That's danbarretvip@gmail.com. Drop me an email. I'll be happy to hook you up with whatever resources we have. I look forward to talking with you. Thanks a lot.

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