Podcast

Episode #78 – Competing in a Hot, Hot Market with Eric Hartsburg

Some investors can run their business on “easy mode”. They’re the only real estate investors in a small market and get all the deals. Sure, they have their challenges too.

But they have it easier than you if you’re in a big city full of competitors preying on your leads. If you want to make it in a hot market, you need to step up your game. That’s just what Eric Hartsburg is doing. He invests in Phoenix, a growing city.

You’ll find out exactly how to thrive under competition and come out ahead. Ready to stop getting beaten to the deal? Listen now!

Show highlights include:

  • The one book all successful real estate investors credit their success with. ([4:28])
  • How to go from a single deal with zero help to dominating a whole metro area with your team. ([7:45])
  • How to get so much trust motivated sellers never want to call another investor. ([11:30])
  • How investors kill trust they earned from business partners, contractors and sellers—and how you can become the one trustworthy investor in your area. ([14:25])
  • The expensive marketing channel that turns a profit in the most competitive markets (your competition might get scared from the price…). ([14:53])

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

Find out more about Eric: https://www.valleyhomebuyer.com/, https://www.erichartsburg.com/

Read Full Transcript

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, well we kind of just got started but you know, I have a day where it ends always here from AdWords nerds. I'm here with Eric Hartsburg. Eric, thank you so much for coming on the show, man. I really appreciate it.

Eric: Yeah. Yeah. Thanks for having me.

Dan: Yeah, it's my, it is my pleasure. We were just commenting on the fact that you, we were both pounding coffee like we knew we were about to talk to each other and we were pounding coffee at the same time. Are you like, how do you take your coffee? Are you drinking coffee first of all? [01:07.4]

Eric: Yeah.

Dan: How do you take your coffee? Okay.

Eric: I like to ice coffee, but any kind of coffee is great.

Dan: Yeah I, I agree. I'm kinda like, I have a preference but I also don't care that much. You know what I mean? Among, as long as it falls in the general, the vicinity, it'll generally be fun.

Eric: Yep.

Dan: Well we'll come back to ice coffee because we are just joking here in the Phoenix market. All I know about Phoenix that's really hot and a lot of people move there. So I'm going to ask you about Phoenix a little bit. Well let's kind of start back at the beginning and let's kind of talk about, you know what got you into real estate investing? No I always say like for people that are in real estate investing, you know like, like I've been for six or seven years now and you've been, it's kind of easy to forget that like most people have no idea that real estate investing even exists. So I had a conversation with someone today and I'm trying to explain it to someone and I actually didn't do a very good job. I was like, well, it's like trying to explain like the whole industry and everything. So like what was your in to real estate investing and what got you started? [02:06.8]

Eric: So, so I got my real estate license in 96 and, and within a couple of years realized that working with, with buyers and sellers wasn't really what I, what I liked.

Dan: You were, but you were an agent.

Eric: I was an agent. Yeah. I'm still an agent. I'm a broker now, but found a HUD house that and kind of did the numbers. And my mentor at the time was, was telling me that if, if his client doesn't buy it, he's going to buy it. And then I thought, well if you don't buy it, maybe I should buy it. No but nobody bought that house that we know.

Dan: Yeah

Eric: But but that's what kinda got me, got me thinking about it.

Dan: Oh so you never even bought it. You didn't buy it, but that was just like your, you start thinking about it.

Eric: Just started thinking about it. Yeah. I just started thinking about it and read ‘Rich Dad, Poor Dad’, you know, like a lot of people and, and

Dan: Hmm.

Eric: Started looking for houses and, and started buying HUD houses is what, what kinda got me into it. Bought the first was a live in flip, which I won't do again. [03:01.9]

Eric: You know, trying to paint the pink walls and

Dan: And still remembering at the same time with the things and schemes and everything.

Eric: Yeah it’s not fun, but yeah, just, just started, I just learned that I like doing the, the, the fix and flip more than, than working with the buyers and sellers. I think

Dan: You know it's funny, like I kind of sort of detected as I've had a lot of these conversations. There's kind of like two really broad kind of categories of investors and there's like the people who love the deal making side and there's the people who love the actual like flip side. They sort of get into it because they like rehabbing and they sort of learned to do the deals in order to do more rehabs. And then there's people that just love deals that kind of almost doesn't matter that it's a house. It could really be anything. Right. So it's like where, what got you into it? Was it one or both of those or what was your kind of [03:55.1]

Eric: Yeah, that's attracted you to it? You know, I'm not sure myself. I, I've thought about that and I think I like seeing the project come from being really ugly to that finished, you know, it's nice pretty and somebody's going to love it when they walk in. But I'm a deal junkie too, so I don't know,

Dan: It doesn't help. It doesn't hurt that they have both, they are kind of like, you know, you're, and you’re making something better. But there's also that big kind of dopamine hit of like actually doing the deal.

Eric: Yeah

Dan: You know which is like pretty awesome. And yeah, I think there's, there's probably a reason that investing is, is popular. It's probably the combination of those two. I want to ask them about ‘Rich Dad, Poor Dad’, because again, everybody brings up that book. It's like, and I read that book too. I didn't become an investor. I feel like I skipped the chapter they talked about. The lesson, it's funny like I read it in college, in the lesson I took away from it. The thing I really remembered was don't buy a new car. That was like the thing, the lesson I took away from it. Everybody else I talk to is like, yup. And then I went into real estate investing and I was like, I totally missed that part of the book. So like what did you, when you read that, were you like immediately like this is what I want to do, this is for me. [05:06.1]
Like what was the big takeaway from that book specifically? Do you remember?

Eric: So it was a long time ago, but I think what happened was just that paradigm shift that, you know, going from just consuming to maybe build in some assets and flipping isn't really the ‘Rich Dad, Poor Dad’ way, but, but that mindset of not spending all your money but, but investing it so it can come back to you.

Dan: Yeah. I don't know if that's where I've had this fantasy for a long time because I, I ironically, like I work in real estate investing, you know, that's all that we do. It's all we work with, but I have like zero interest in actually like really getting into it myself. Like I might give someone money, but I'm like, I don't want to. The whole idea, it sounds like a nightmare to me, right. Because I don't like working with my hands or complicated projects or whatever rides you want to like put in an account. But I don't if it's, it's from ‘Rich Dad, Poor Dad’ that I got this. But for the forever I've had the fantasy of like owning gumball machines, like everywhere, like thousands of gumball machines that just all produce $50 a day or whatever. Anyway, so I don’t know, that's a sort of [06:11.7]

Eric: Yeah, they're hearing you're there.

Dan: So you were in this situation, your mentor. So first of all, I'm curious, was your mentor someone local or were you, this was somewhat like an agent that you were mentored with,

Eric: It was another agent. So basically I was working for them. They were doing a lot of deals just regular real estate helping buyers and sellers. And I was there as their assistant, but learning from them and they're the ones that actually gave me the book ‘‘Rich Dad, Poor Dad’.

Dan: All right. That's awesome. I mean it like it's such a huge deal to have someone that's even just a couple of years ahead of you that you can shadow. Because it's like you, you know, in all the situations you don't know, you don't know. It's kind of hard to ask the question that's really gonna make the big impact. Right?

Eric: Yeah.

Dan: To kind of model. So, so you're doing that, you had this moment where nobody ended up buying the house, but it sort of puts you in that mindset. So what was your first deal like? Like how did you go about getting your first deal and sort of making it happen?

Eric: So the, the first deal was, was selling the house that I lived in, taking that money and buying a, a HUD house that I was going to move into, flip and sell and then keep on going. [07:17.0]

Dan: Oh that was the live in rehab.

Eric: That was 11 flip. Yeah.

Dan: Yeah. So when you did that, were you like this is it, I quit, this is my business. Like how did it turn into what you are now? We'll use this as kind of a bridge to talk about your website's, your here from valleyhomebuyer.com.

Eric: I should have said that in the beginning valleyhomebuyer.com

Dan: You guys are buying houses all over the Metro Phoenix area. So it's obviously very different kind of organization than it was, so how did you move from that? Doing that one live live in rehab to where you are now?

Eric: Yeah. So just, you know, taking the funds from, from that, the profit from doing the flip and buying a couple more and then, then I, I max out cause I was doing everything. I was doing all the, all the renovations, the flooring, bringing in my friends to, to help and you can only do so many at a time. And I thought well that's, let's see if I can, hire some guys actually do the work. You know, because I was the realtor, I was the contractor, I was everything. And just just scaled it up to where to where we could do more than more than one at a time. So, so, you know, when you, when you start out, you have the funds to do one and you gotta you gotta fix it, you got to market it and you got to sell it and then you can do it again. [08:27.1]

Dan: Did you know that was the path or were you just kind of like focused on the, the immediate thing ahead of you and then you look up one day and you're like, well, I got a whole, the whole real business here.

Eric: Yeah, so it was a path that I wanted for sure whether I knew I could do it, could work or not. You know, I didn't know until I, I did a few, but, but yeah, that was once I did the first one, it was like, this is what I want to do. Like I, I enjoy it.

Dan: Who's this all in Phoenix?

Eric: Yeah. Yeah. It's all in Phoenix.

Dan: So okay, so well, we'll kind of transition now to the current day. You're are running valley home buyer, which again you can get to at valleyhomebuyer.com in the Metro Phoenix area. What you were saying is kind of Phoenix proper and then like a whole bunch of surrounding cities that all kind of get lumped into this big kind of Phoenix area

Eric: Right

Dan: Now, you know, I always say like I have sort of like a weird impression of like real estate investing markets because my end to the market is in the PPC sort of world. Right? So I primarily, I view like kind of real estate markets through what the competition is like for online leads. [09:25.8]

Cause that's, that's what I do. Right? So it's like from my point of view, Phoenix is like an absolutely bonkers competitive market, right? It's been one of the more expensive markets online for a long time. I know that like it's, it's growing, there's a lot of competition there. So is that, what's your take on the Phoenix market or on like the other side of that kind of equation?

Eric: Its far competitive, it's definitely competitive and you know, our, our, our costs are high. It's just there's, there's always three or four other investors talking to the seller and sometimes five, six just but,but the numbers work, you know, if we stay at it.

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Dan: Yeah, so what, what do you guys do in order to make yourself stand out? So you were saying, and by the way, so if you're an investor, first of all, you should be an investor. If you're not an investor listening to this, I don't know what your investor, but anyway, if you're an investor and you're listening to this, I was going to say, I highly recommend you actually go check out valleyhomebuyer.com,so this is Eric's website here. You guys are using InvestorCarrot right? for your website.

Eric: Right?

Dan: You’ve done a fantastic job of really making it your own. It looks really cool. They've done a really great job of like the design, like the color scheme and everything. I like it, I even like the logo’s has got a cactus in it. It's like, it's cool. You know what I mean? Like just looks unique. So like what do you guys do in order to make yourself stand out?If you're getting the deals and there's three or four people there every single time, this is an experience a lot of investors have. How do you make your way through that sort of make, make them sell to you rather than anyone else? [11:33.9]

Eric: So I think the biggest part is just the credibility and putting ourself out there. You go to the website, you see my face and we're, we're always trying to get the reviews and the testimonials. And that's the biggest thing is that once, if they, if they call somebody else, maybe they can't find that about them. They can't, they don't know even know who they're talking to. And so that's, that's our biggest, that's our biggest thing is just putting ourself out there.

Dan: Yeah. You guys have done a great job by the way of gathering reviews and testimonials. You know, you make a, you make a big deal on the side of your better business Bureau rating. We were even talking before the call, I was just checking on the Facebook page. You've got a bunch of positive reviews there. You've got these really great photos of Robert who is, so Robert works with you, right? It's on your time.

Eric: Right

Dan: Okay. So Robert, who by the way is just massively jacked dude, just look at these pictures, super young dude. But he's in these like really sweet photos with like people who have given you testimonials and stuff and it just, the whole vibe is really positive and great. And I think you guys have done a really awesome job of that. Do you have like like is that just like a process that you do or you always ask for the review? Like how do you go about getting those? [12:47.8]

Eric: Yeah, and it's more of a recent thing. But yeah, we once the, once the deal is done, we always ask, we send them the Google link or they can submit it on the, on the website. I'm gonna try to get a picture if we can. And, and we always, well you always fall through. So we don't ever promise something that we're not going to do. And I think it comes out when, when you see the reviews, those reviews are all, they're all real and the people are thankful that we help. And I know we just tried to do the right thing.

Dan: Yeah. Well I mean I think it's one of those, it's an interesting kind of thing because there's the tactical piece of it, which is like, you know, send them the link ask for the review, make it a process, all that stuff. Like we've, I've talked about that in the REI marketing nerds Facebook group. I think I did a whole training on it, right? So it's like kind of the tactical piece of like just getting it. But you raised a really interesting point, which is if they don't have a good experience, a good review,

Eric: Yeah, yeah

Dan: It’s like you don't do a good job and yeah. I was just going over this with our team. [13:44.9]

It was literally breaking down. Like, you know, we go through this process of breaking down like our goals for our team and how we interact with our clients. One of the things that we're saying we want, it was like a sense of trust between the client and the team. And I'm like, okay, so like we want them to have a sense of trust. What are the things that need to happen or you know, we need to have in order for people to have a sense of trust. And one of them is like if you make a verbal commitment, then the team follows through on, right. So it's like every time you make a verbal commitment, even if it's a small, you know, we were sort of doing you know, an analysis of like a relatively small interaction where someone said, Oh, you know, I'll send you an email about that after the call. And then they didn't send the email and it wasn't a big deal. But I'm like, if you want them to trust you every time you say something and then you don’t, do it, that deducts a little bit from that equation. Right. It kind of makes it a little bit less. So.

Eric: Yeah.

Dan: Yeah. I think that's, I think that's really awesome. So like you guys are in this kind of like nuts market, a lot of competition, a lot of other investors. What is your marketing kind of stack look like? And you have to talk about specifics but just kind of in general, kind of like what have you guys found to be like useful you marketing wise? [14:52.2]

Eric: Yeah, so we started with the postcards and we still do postcards. It's a, it's expensive but they, they still work. And then the, the PPC and, and just go on with the the organic SEL building, just keeping it, keep trying to add, add content, make it, tweak it and, and stuff. Those are really the three things.

Dan: Yeah. I mean, I think in a, in a market like yours where the cost to buy leads is very high, the value of organic leads goes up a significant amount,

Eric: Right?

Dan: Because it's like, well, Hey, even if it's really competitive it takes a long time and it's slow, you have to realize it's like, well what in a, you know, if I'm in Toledo or something, what might be a hundred dollar lead? And PPC in Phoenix is sometimes like a 300 or $400. Right?

Eric: Right

Dan: So it's like, wow, it's like the marginal utility, of SEL really goes through the roof. And I think, you know, it's just one of those things. Interesting things to kind of depends on the market dynamics and stuff. So Phoenix as a market is, and I'm trying to remember, I actually saw someone give a presentation specifically about the Phoenix market and I was really blown away by the, the extent to which it's growing or it was growing at the time. Is that still the case? It's like, well, the fastest growing cities in America, right? [16:08.4]

Eric: Yeah. I believe it's, I think we were number one last time I looked. Yeah.

Dan: So if you actually do live in Phoenix, like where do you, like, where do you live? Born and raised in Phoenix. So yeah, I'm, I'm actually in, I live in Peoria, but it's you know, it's just a suburb of Phoenix. So like are you, how's that? like what does it feel like to actually be from there and being the fastest growing city in America? Is it just like constantly construction and everything's nuts and it's like sprawl everywhere, like I haven't been to Phoenix probably since I was a kid. So like what is it actually like there? Yeah.

Eric: Yeah. So it, it's, it's the sprawl. So the, the new stuff is usually on the outskirts and if you're in the center you don't see it. If you're out in the outskirts, you see, the same building all the time.

Dan: Yeah, that's interesting. So like for you as an investor, how does that affect, well you do and kind of properties you look at. And I mean it, it's one of those things where there's a lot of demand. Are you like trying to buy houses that are closer into the city center and those are worth more because people don't want to live further out or like how does that affect what you do? [17:11.3]

Eric: Yeah. And so I target the stuff that's near where we live and work and, and so I, you know, I have a preference for that stuff that's around the office and we're in the center of Phoenix but we'll, we'll buy anywhere, you know, we'll, we'll buy even know a hundred miles out out of the, out of the city of if there's a, a house there for us. But we do all the work ourselves, you know, we have the, the rehab crews, so there's a certain type of house that I really like and, and I, I just go after those.

Dan: You have a pretty good sense of the kind of deal you want to do and you're pretty focused. Do you ever worry about like, so this is, this is maybe me speaking as a non-investor myself, right? Part of me feels like if that were me, I would worry about like running out of the deals that I want. Do you ever worry about that or is it just like look, such a small percentage of the total number, it doesn't even, it's never going to happen. Doesn't matter.

Eric: So in Phoenix there's a big percentage of the houses that are good deals for me. So just the, the just the Phoenix in general is a fairly new city. So there's a lot of stuff that's built in the seventies and eighties that are perfect for rehabs and, and that's what we go for. We do a lot of stuff that's built in the last 30-40 years.

Dan: Yeah

Eric: Yeah, plenty of them. [18:28.1]

Dan: Yeah. Cool. So is it true that you can fry an egg on the sidewalk? I told you I was going to get you and that’s your question.

Eric: You know, I've never tried it, but I think you could, when it's 120 odd, you probably could.

Dan: Yeah. Holy Lord do. That is just mind boggling to me. Being a Connecticut born and raised it as a truly bizarre, Oh, I should say born in Massachusetts, but same thing. Anyway. well look, Eric, this was awesome. You are, I got to say so like even just this conversation that we've had, just pretty simple conversation so far. I got to save it in that like you definitely give off like very soothing vibes, like very like vibes. So I think it's like, it really goes to show like, you know, you're talking about in differentiating yourselves with sellers and kind of just putting your real self out there and like make awesome people you, it really goes a long way. I think there's a lot of people in this industry that take a really like kind of high pressure approach and yeah, I just appreciate your whole approach to what you give. Cool [19:28.3]

Eric: Cool. Thank you man.

Dan: So if people want to find you online definitely. So valleyhomebuyer.com now the homebuyer.com is the main website anywhere else you want them to check out or is that like the main place?

Eric: So if there's a, let's say there's an investor or somebody that wants to maybe do a deal together, you can also reach me on my personal website, erichartsburg.com

Dan: Okay, cool. Eric hartsburg.com so I'm definitely going to have links to both erichartsburg.com and valleyhomebuyer.com in the show notes for this episode, which you can get at adwordsnerds.com/podcast but definitely go check that out. Definitely. If you're an investor and you want a really good example of a site that is really doing a good job of speaking to sellers valleyhomebuyer.com is is a great place to go. And if you're an investor, you want to team up with the Eric Hartsburg. You can do that@ erichartsburg.com I highly recommend that. Eric, this was awesome, man. Thank you so much for coming on the show. I really appreciate it.

Eric: Yeah, thank you, Dan. I had a good time. [20:28.9]

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