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How AI Has Changed the Game of Driving for Dollars - With David Lecko

David Lecko is responsible for bringing the popular driving for dollars app DealMachine front and center in the real estate world. It’s an amazing tool—one of the best out there. Here, David joins me to talk about how artificial intelligence (AI) is changing the real estate game. David’s developed one of the most successful real estate software platforms in the industry, and he’s an expert in tech. We chat about how leveraging AI in your business can make a huge impact.

Driving for dollars is an age-old way of finding real estate deals, and DealMachine makes the entire process smooth and simple. Through DealMachine, you can even outsource this task to other members of your team to add properties on your behalf. David and I talk about how he used ChatGPT to make DealMachine even smarter. We also discuss how to use DealMachine beyond driving for dollars, the ideal number of properties to pin to get a deal, and more. 

Make sure to click the link below to try Deal Machine for free.

Listen and learn:

What’s inside:

  • How DealMachine is changing the world of driving for dollars.
  • How David used ChatGPT to enhance DealMachine.
  • DealMachine mistakes to avoid.

Mentioned in this episode:

Download episode transcript in PDF format here…

Joe: Hey, what's going on, guys? Joe McCall, Real Estate Investing Mastery.com. Wow. After, like, five attempts, I finally got this thing to work. Hopefully, we're good to go. I think we are. We've got a great guest today. Name is David Lecko. A lot of you've heard of the Deal Machine app. This is a driving for dollars app that David kind of brought to the center stage of real estate investing, pretty much invented the concept and made it, you know, huge. And it's an amazing tool. One of the best ways to find deals driving for dollars. Now we're going to be talking a little bit about driving for dollars, but we're mainly going to be talking about how A.I. Artificial intelligence is changing the game for real estate. David has developed one of the most successful real estate investing softwares in the history of real estate investing, to be honest. And he's killing you right now. He's well known as one of the, you know, the premier experts in our industry and in our space for software and all things software and online, whatever. So we're gonna be talking about how artificial intelligence fits into all of this. Can it really be helpful for you? Is it of any good, is it of any use? Who knows? But I can tell you this, I've got a lot of friends that are using Deal machine for their driving for dollars now. I have used it in the past. I'll be honest. Open book. I'm not using it right now because I'm doing vacant land deals with vacant land where we're flipping out in the middle of nowhere. I'm not paying people to go driving for dollars, although I know somebody. David I know you can't hear me right now or you can see me. Maybe you can hear me. Yes. Okay, You can I bring you on in a minute. I know somebody who's doing driving for dollars for vacant land, which is crazy. And like what? How does that work? I don't know. But we're going to be talking mainly about artificial intelligence and how you can use artificial intelligence and tools like Deal Machine to actually grow your real estate investing business, get more leads, make more offers, do more deals. If you're interested in that, I want to check I want you to check this out right now. If you go to Joe McCall dot com slash deal machine you can actually tried for free if you go there right now Joe McCall dot com slash deal machine and check it out you can get it for free also in the near future. Coming up you're going to be doing another interview with a good friend of mine, Zack Boothe, who I've had on this show three times I think four times. And he's going to be coming again soon. And I've got some my kids to want to do. One or two of my kids and their friends want to make some more money, and they don't want to be necessarily behind a computer. So I thought to them, I said to them, Well, why don't you go driving $4 for me for houses in the St Louis area? And so I asked Zack, I said, Hey, can you do a podcast with me talking about how to use driving for dollars and how to use deal machine so I could maybe pay my kids and his friends to go driving for dollars for me and bring deals to me for houses. And so we've got a podcast schedule. We're going to be doing that. So stay tuned. That's coming soon. But for now, in the meantime, this podcast is now officially brought to you by Joe McCall dot com slash deal machine. David, I don't know if you knew this, but you're my new sponsor for the show, so go to Joe McCall dot com slash deal machine. All right. So we bring David on. Hopefully I got my thing working here. Bam. I think it's on. Hey, David, How are you, man?

David: Hey, Joe. It's great to be here, man. I'm doing great. I'll tell you what, one reason why it's good to be here is because I remember going, you've been in the industry longer than me, but I've been for about six years now and went to the family reunion events and could not believe how everyone gave you a standing ovation when you walked in the room because you were the goat. And it's not because you're a goatee. They really did believe and do believe you're the greatest of all time when it comes to teaching people you know how to build financial freedom in their life. So it's awesome to be here on your podcast.

Joe: I'm humbled by that and I kind of forgot about that, but I'm glad you're here. Listen, give us a brief history story, David, of Deal Machine and how did you start it?

David: Yeah, So back in 2017, my life sucked. I was working as the only software engineer at this company, and I had also been a tech support person. So that meant if that software had a bug or went down, I had to answer the call and then fix it. So I brought my laptop with me everywhere, slept with it under my pillow, took it to the bar, and I even had to miss part of my friend's wedding because the system went down. I was the only developer. This software company wouldn't hire a second developer or support person. So man, if anybody will want in financial freedom, it was me. I was like, I got to get out from under this burden because I'm not even getting any upside in this business. I've got to actually get some upside if I'm going to grind away and put in that kind of work. And so I started doing some I kind of actually got the idea from Rich Dad, Poor Dad that I needed to either own a business or I needed to own rental properties so that way I could own a piece of that and get some recurring revenue. And so I went looking for a house that would cashflow, except none of the properties listed for sale seemed like they were going to cash flow. The mortgage payment was going to be too high compared to what it could rent for. So I was kind of discouraged. On top of that, the guy who owned my software company said his rental property is only cash looks. He bought them in 20. So like you hear. Buy these kind of gasoline properties? No. So I was discouraged again, but I kind of just didn't give up and went to a real estate meetup, found a bunch of people who are finding these great deals and they said, Go look for rundown properties. Write them a letter saying, do they want to sell their house? If so, give me a call. And so I went looking for rundown properties. Now here's the hang up. I was feeling great, feeling motivated, but and it was a lot of fun to go look for the houses. Actually, I was learning it a lot about my neighborhoods going on streets I'd never seen before. And then it hit me. So I actually saw a property that was under construction and I knew that I drove by that house before and I was like, I drove by this house. My house was I was somebody else working on this. So I went and looked up who owned the property. And sure enough, somebody just bought it for a price. That could have been a great price for me. I could have bought it for that price, I felt like, and actually done a great deal. But I didn't get to it because I didn't even reach out. And so I was like, Man, I got to solve my follow up problem because I'm having a trouble following through, which is just something a lot of humans here have trouble with. And my solution, since I knew a little bit of code from my job was I just made this basic app for my phone wasn't on anyone else's phone. It would let me pen the house, connect to the county records, just show me right then and there who owned it, and then I could actually send a letter, kind of integrated the app with a company that would send my mail for me. So I did that and then I would, repeat, have the app repeat that every three weeks, actually, so that they would get another letter because I knew follow up was important. Just basic marketing advice. Follow up was key. They're not going to respond in the first letter. So anyway, I built this widget for myself, use it for about nine months before I realized it's something other people would want to use it to. And short story long. You know, I've got 11 rental properties, almost $200,000 in rental income, about 70,000 net off that. So I've kind of achieved my initial goal financial freedom. The app, though, didn't even mean for it to be a business took off and that's become its own business. So short story long. That's what happened. That's why I started getting into real estate investing.

Joe: I love that you found a need and you just created something to fulfill the need.

David: Exactly, I wasn't trying to convince anyone of anything. I was like, I want this. I don't care what anybody else thinks, like I'm going to use this.

Joe: Did was there any other driving for dollars app out there at the time?

David: Yes, there was an app out there, but it didn't have all the pieces. It let me build a list by pinning houses, but it didn't tell me who owned the house. It didn't send mail. So it wasn't going to solve my follow up problem, which was my main thing that I was going to solve.

Joe: So this is really cool. Somebody is wondering, I'm sure, out there right now what is driving for dollars? What does that mean? So can you explain that real quick?

David: Yeah. So driving for dollars is age old, decades old way of finding great real estate deals. You go look for rundown properties and those are going to be properties that if they need to sell, you can get at a discount because they can't sell it on the road. The realtor And they also probably don't want to put the money in to fix it themselves to sell it. So it's one of the best lists because you can buy lists of people that might want to sell, but the people whose houses look rundown are the ones that really probably have to sell to an investor if something happens in their life because their house is rundown. So and it's also a good list because you can't buy that list. You have to make it yourself, which means less people have it, which means the people, the sellers are getting less mail, less communications, less solicitations from investors. So your offer kind of sticks out. And so those are cool to see.

Joe: So important. You're absolutely right. It's so important because you think, Well, I can. Everybody's just going out and getting a list, the same list everybody else is getting, but there's not a list that you can go buy and download of rundown, derelict homes and even the quote unquote vacant list that you can download. Most of those house has already been vacant. So when you can go actually driving for dollars and looking for houses that the gutters are falling down, the grass is always raised. There's a bunch of junk everywhere. Usually that means there's some distress going on and either the owner is in the house and is maybe checked out. Maybe they just want to get rid of it or soon will or the house is vacant or there's a frustrated landlord who owns that house and that tenant isn't taking care of the property. And the landlord's getting tired of getting all kinds of code violations and cease and desist orders and notices from the county or the city saying take care of this property. And probably that landlord's not getting consistent normal rent every month from that tenant. So this is a list that you can't buy anywhere else. And it's not. So it's a way to go look in the best neighborhoods to find the properties that need updating. They look like they're falling apart. They look like they need a lot of updating and then a lot of those properties, too. I'll say this may or may not be your typical list that you get, right? It could be it could be owner occupied or it could be an absentee owner owned property, could be a vacant property, could not be a vacant property. You know, they're all over the. Board and when you can get physical eyes on This is what I love about strategy. When you get physical eyes on it, that nobody else is doing this right.

David: Any type of barrier like that is worth going through, especially if you're new. Because all these big time investors like Joe, they will they'll spend money to go get leads. But if you don't have a ton of money, you do have time. Right. And so a lot of people just don't take the time to build this incredible list that's going to give you a higher ROI by then. Pretty much any other list that you could.

Joe: I say this all the time, David. If I were if you were to drop me off into a new city and I had I couldn't go home until I made five, ten grand, this is what I would do. I would go driving for dollars number one. And number two, I would start getting on the phone and calling after I drove for dollars and then downloaded the list, Skip, traced them, called them, sent them letters. I would also then be on the phone calling landlords and calling realtors and just trying to find deals over the phone. But like, those two things are what exactly what I would do, especially if I didn't have much money. Because how much does it cost to drive your car around and just pin properties on an app? Skip trace some call them from your phone while you're right there in front of their house, right? That's cool.

David: Yeah. I'm a big time investor. We spend 20 grand per month buying lists and sending lots of mail out to it. The reason why driving for dollars is so much cheaper is because you have to send a lot less mail if you're sending mail to that list. And so the cost really comes down to maybe you're only, you know, sending a thousand postcards out to get a deal and then big time investor may have to send five, 10,000 postcards out to get a deal.

Joe: Okay. So here's the cool thing, though, and then we'll get to I promise.

David: Sure. Absolutely.

Joe: You don't have to be the one doing the driving yourself, do you? How does that is work where you can hire other people then? And they can what? Log into your app and post leads into your deal?

David: Yeah. Yeah. So the app lets you add on like a team member and the team member can add properties for you. They can click track routes, you could see where they actually drove. They actually make sure they drove a certain number of hours. If you're going to pay them hourly and you can tell what neighborhoods they drove through that way, they can also add pictures of the houses that they add, which I recommend for two reasons. One, the picture will show up on the postcard. And when a homeowner like sees that, they know it's like not a Google or satellite image, they know and can tell you're actually there. So I'll get calls all the time, says, Hey, I got a bunch of postcards, but I called yours because it looks like you put a lot of time into doing this and it looks like you're actually there front of my house. The other thing is you can actually make sure they're adding the right types of properties that you want. So you don't really want properties in perfect condition and you also probably don't want properties that aren't worth a lot if they are fixed up. So what I mean by that is if they're in a neighborhood where literally all the houses are burned down and none of the properties are more than three grand, you can't fix a house up like that and then make money at nothing else in neighborhoods worth for your grant. So that's why you want to have them add pictures. That way you can be like, Hey, this was a good house because the gutter was falling off this one, it's perfect. Why did you had that one there? Like, I don't know. And you're like, Okay, great. Well, don't add perfect houses again. Add some with overgrown bushes or peeling paint or a full mailbox or, you know, any of those signs that show that the house is like a little off compared to the rest of the street.

Joe: Yeah. Okay. Really good. And again, I want to tell you guys go to Joe McCall dot com slash deal machine to get it for free Joe McCall dot com slash deal machine. Try it out for free rather you do have to pay for it eventually but try it out for free. Okay. Also I wanted to say to Zack Boothe is a friend of mine. I mentioned it earlier where we've talked about Deal Machine before and we're coming up with a new episode. But if you go to my YouTube channel and just do a search for my channel, Joe McCall and then do a search for Zack or driving for dollars, you'll see the previous episodes we did on it where we kind of walk through how we did it, how we did it all. So David, the software is amazing. So it does cost the investor me who's getting it. And there's different levels and you have different drivers doing this for you that the different levels, but then the person doing the driving, they don't have to pay for this, right? They don't have to pay for the app himself.

David: Yeah. When you add a team member like that, they wouldn't have to pay. No, that's correct.

Joe: Cool. And so talk about A.I.. Seems like everybody is talking about artificial intelligence. What? What are you doing with A.I. inside of the machine right now?

David: Okay, As you would know, as somebody who helps people get financial freedom themselves, a huge barrier is people get stuck in analysis paralysis. And so in order to combat that, when I came out earlier this year, we said, let's integrate ChatGPT into deal machine which is an advantage because now it can know real estate data because it's actually you're talking to it through deal machine. It has access to that real estate data was achieved typically does so about you can ask it like hey analyze this property for a wholesale deal and it can help you figure out how to analyze it in that chat interface. It's so easy to use like ChatGPT would do, and it's actually helpful with math because it's got access. So what the cops are, it's got access to what property sold for a nearby. He's got access to what the properties assess and it knows general rules of thumb about estimating rehab costs, for example, based on square footage and how serious the renovation needs to be. So all these questions that hang people up that are you're starting to do this for the first time. This is we're showing that this can actually help people get over the edge and take more action so that that's exactly what it is. And it's like a chat interface. You can chat with it openly, like you do ChatGPT or there is about 12, you know, paths that you could go through, such as analyzing a property for a wholesale real estate deal as an example.

Joe: Now did you already go do the work of programing ChatGPT on how to evaluate a deal? So like how does it know that already?

David: Right. So it does have access to the internet so it knows what the 1% rule is and it knows, you know, it may cost $17 to replace carpet and paint that, you know, per square foot, for example. And so it just knows that stuff. But now we can give it access to what the square footage is and what properties have sold for nearby so it can help calculate a reliable ARV and a chat interface. So that's how it works. And I'm really pleased with the way that it came out and it just as easy to talk to as ChatGPT.

Joe: So you can do this inside of deal machine inside of the software.

David: You would do it inside of deal machine. We Yeah, you like pull up a house and the AI will actually pop right up there and you can ask it a question from there.

Joe: And I wish you could show us. We tried to set it up where you could share your screen, but we can't, and maybe we'll try it for free.

David: Well there's a seven day trial, so you could try it for free through listening. And you want to try that out.

Joe: So they can go to Joe McCall dot com slash deal machine.

David: Yes, exactly.

Joe: Okay, cool. So give us a give us another example of like you pull up a house, you're looking at it. What is the exact text you type in?

David: Okay, well, there's a button. Analyze this property. How do I get in touch with the seller? Help me write it SMS to this owner. Help me write a cold call script, calculate the offer price. Help me find a title company that's investor friendly nearby. Help me calculate repairs on the property. What I'll be practice negotiating. Well, yeah. Yeah. And how do I find cash buyers for this property? How do I find renters? Those are the pre-defined, you know, routes that you could go. And of course. So you can also just ask it.

Joe: All right, so you got this house, You're looking at it. Could you tell could you say charitably, what do you think this house is worth?

David: Oh, absolutely. Yeah. Yeah, exactly.

Joe: Really?

David: Yeah, why not?

Joe: Oh, my gosh. All right, let's look at this. I wish I could share my screen, but I'm going to go shadow banner icon. I don't have deal machine open right now. How much is.

David: Yeah, you can't do it through another software like that because it doesn't have access to real estate data. That's why it's unique to be using it through deal machine.

Joe: That's what I was wondering.

David: Because we give it access. It can access our real estate data.

Joe: Okay, Because I'm typing in the address of one of my properties here, this says, Hey, we can do that.

David: Yeah, yeah.

Joe: But that to find out the current value of your property, I recommend reaching out to a local real estate agent. Oh, come on. What? Okay, so you're saying this is. I'm glad we clarified this. This isn't something somebody can just go to chat Dot open AI dot com, right. And type in an address and then have chat to tell you, you know, based on the square footage, what the property's worth or how much repairs it might need or how much you're, you're feeding it in advance through deal machine under the hood, you're feeding it with real estate data.

David: Definitely. Yep. Exactly. That's the difference. That's why it's novel.

Joe: Okay, that's really cool. What's another example of what you could do with it then? Like, you know, if you're on the phone with the seller or maybe if you're negotiating with How does that how does that work?

David: Well, yeah. Okay. So I gave you the 12 paths that are most common. That's what we've kind of come up with and realize people need the most help with. But you could also say, Hey, the seller said this was the best way for me to respond, you know, and you may not be able to type in the middle of a phone call, but you get off the phone and you're like, Man, I came out with this objection. This is what the seller said. You know, what's the best way to go? So, you know, it's as good as Joe McCall, Right? But it's pretty it's helpful because it knows like general sales techniques, because ChatGPT knows the actual Internet up to 2021. So sales hasn't changed that much since 2021. So that's going to be a question that it would be able to help you with pretty well.

Joe: I imagine, too, you could use it to you know, if you don't know how to use a financial calculator, you could probably put in something along the lines of, you know, if if, if I if the house if I buy a house for 100 grand and I put 10% down and I'm paying the seller with owner financing or I'm paying the seller 6% interest, what would my monthly payment be?

David: Oh yeah, you could definitely do that.

Joe: That type of thing too. Right. That's crazy and is are you how long have you had this inside of deal machine.

David: This has been inside a deal machine for two months.

Joe: Okay cool. What's been some of the feedback you're getting?

David: Well, I'll say like 20% of the people 20% more people take the pro plan rather than the beginner plan because it comes on the pro plant. So just immediately when we offered this, we put. It like onboarding and showed them this is how it analyzes a property. Do you want this? And 20% more people are saying yes and deciding to get that pro plan. It's 99 bucks a month, so it's only a little bit more than the starter plan. But that was like a major factor that told me this is actually helping people.

Joe: Okay. So the starter plan is 59 bucks a month, correct? Pro plan is 99 a month, Correct. Includes up to three users.

David: Yes.

Joe: 55,000 leads per user.

David: Yes sir.

Joe: And you get the real estate AI assistant. There you go.

David: Yes sir.

Joe: Route planning. Talk about route planning. What does that mean?

David: Route planning is if you go get like a water shut off list from your county and you're like, Hey, these people, their water shut off. That means they're probably either not, they're not paying their bills and they may need to sell their house. They might be in some financial trouble. And you say, Well, I could text them or maybe I just want to door knock and see who's there right now, plug that list into the machine and say, route me to all these properties and it's going to take you to that in an optimal way to go drive by every single one of those properties, lay eyes on it, then you can knock on the door, see who's there. That's what a route planner would.

Joe: Okay, cool. What if you know, you've got you got your one or two drivers that are doing the driving for you and you tell them, I want you to go into this area. Can you highlight the areas you want them to go into and then it tracks them and you can see, you know, are they going in the area that you told them to go into? Does that make sense?

David: Yeah, We don't have a geofencing. You would tell them, go to these neighborhoods and then after they drove, you could see where they actually drove.

Joe: Cool. All right. Mail sequences. What does that mean?

David: Good question. A lot of these questions. Okay, So, yeah, you're just starting out. Just send the same postcard every two, three weeks. That's what I recommend. It uses our language that just as tried and true. It's gotten a lot of deals and it's very simple. If you're really fancy and you want to start testing things out, then you can use mail sequences which would send a first postcard different than the second postcard, different than the third postcard. But I'll just say this I think the simpler is better when you're just starting out and you just want to add properties that look rundown and then communicate with the owners. How are you going to do that? With mail, with phone calls, texts, door knocking, and really everything else is a distraction. I would just focus on adding properties and sending mail. But if you're sophisticated, would you have the sequences? If you want to change what the postcard is on the second, third and fourth time.

Joe: All right. So you're also saying, like if I if I'm paying a driver to go out there, I can change his permissions where he or she. They can't send the mail for me. They act right. And then I've after I see it, it looks like a good potential deal. I can then send the mail, Correct. Okay. Because I yeah, I'm sure somebody is thinking, well, man, I don't want my driver to just all of a sudden spend $1,000 sending postcards to crappy properties.

David: Yeah, exactly. They have permissions where they can't see even the owner. You don't want to go that way. So. Yeah, Yeah. Doing things. You don't want them to do this.

Joe: Okay, So if you had a driver, like what are some what are the what are the average number of houses that somebody who's driving $4. I know it depends on the zip code in the area. Let's say just a good class B, class C rental neighborhood, you know, where if you're in the Midwest, you can buy properties for 100, 200 grand and they're renting for a thousand bucks a month or 1500 a month or whatever kind of a good Class B, Class C neighborhood homes are built in the fifties or, you know, 1950s or later or whatnot. Okay. So you're driving those neighborhoods. How many leads can you actually see and put in to deal machine that might be potential properties within an hour or 2 hours? Does that make sense?

David: Yeah, in a Yeah. So okay, what I what I would recommend doing is if you're if you're looking for a property that's maybe like perfect condition worth $200,000, that would be like a Midwest market, like Saint Louis where you live, like Indianapolis where I invest. I would say you need to add 400 rundown properties and communicate with them each three times in order to get one deal. Okay, So that would be I think you can add if you're adding photos, I think you could probably add like 12 to 15 properties an hour. If you're adding 25, you're probably in a neighborhood that is too rough. You know, you probably shouldn't be driving for dollars there because properties probably aren't going to be nice enough. And if you are adding like two properties per hour, you probably in a neighborhood that's too nice, you know what I mean? So there's kind of a sweet spot. I found that, you know, maybe 12, 15 per hour.

Joe: Okay. So that's very good to know. So if you're in an area in 12 to 15 properties an hour that you're adding into a deal machine and that's with you, you know, you're drive and you look at your phone, you see a property that looks good, you pin it, take a picture of it, maybe you add it in the database, drive on to the next one. So when you're driving, you're just you're just looking for properties. When you get home, then all the information is there on your computer, in the browser over the Internet, Right? You can see the properties there. And then you can if you're getting 10 to 15 an hour. So if you're doing this for 3 hours, you're getting 30 to 60 of them, you know, let's say 40 of them. Then you're saying if you need about on average the numbers, you're seen, you need about 400 of these properties to do a deal.

David: 400 divided by 15 would be like, what was that, 26 hours? Wait a minute.

Joe: 400 divided by 15. 26?

David: Yeah. You're going to be you're going to be doing some driving.

Joe: Okay. But hello. That's not a lot of money. I mean, like, it's a lot of time, but if you could do that in one week, a couple of weeks, What if you did that in one month? Well, if you could do one deal a month and you can make a $10,000 profit. So 26 hours, approximately round numbers, not promising or guaranteeing anything, but let's just say 20 for let's say, 30 hours of driving to do one deal. And you took 30 hours divided by four weeks. That's 7 hours of driving a week. Divided by five days. That's about an hour and a half of driving every weekday. All right. That's not a lot. And then that is that cold calling or is that just emailing them or I mean, sorry, not emailing, cold calling and sending them letters? Or is that because the numbers will change then too, won't they?

David: Yeah. So most of our users send direct mail. So if you take 400 properties contacting three times each, it's 1200 postcards and it's actually going to be $0.55 for postcard. So it's like 660 bucks is your expense to get it. Okay.

Joe: Again, this is why this is such a good list and you can't buy this list. You only have to send 1500 or so postcards. Is that right? But the number you said about 1500 postcards. Hopefully get our numbers all right. To do a deal. Like, normally, if you're sending if you're buying a list of absentee owners with equity or something like that, you might need to send 5000, 6000 postcards to do a deal so you don't have to do as much direct mail. And I was talking to Zack about this. You don't have to do as much direct mail to do a deal when you're doing driving for dollars. I was talking to Zack Boothe about this and he was telling me joke the way he structures his drivers, he pays them a certain amount of money per hour to drive plus a certain percentage of his profits. So some people try to do pay other people driving for dollars and then paying them commissions out of the deal. Problem with that is people flake out really quickly. Right. But if you get somebody good, you can pay them 20 bucks an hour to go driving for you. And then at the end of the day, your cost per deal is still going to be less than doing direct mail. Paying somebody to drive for dollars on an hourly basis, does that make sense?

David: Plus, then when you're new, you're going to get a lot of benefits from driving around and learning your neighborhood as well. Yeah. So that you're going to get the double, you know, bonus of that.

Joe: Yeah. Super cool. What are you the guys that you're seeing then and companies and girls, whatever that are doing this successfully? David What are you seeing them do consistently on a regular basis? Like what are some of the best practices?

David: Yeah, add adding properties and sending mail. I mean that's really not focusing on too many other things. They're focusing in their CRM, just focusing on revenue generating activities, adding those properties, sending mail or calling. But and typically they're sending mail at Deal machine. And that's really it's simple. You know, it's like it's complicated too much. It just kind of actually kind of hurts people. I've noticed when they're starting out.

Joe: Sending postcards. Do you some of your best users send the mail and call them, do both or just send the letters and talk to anybody who responds?

David: Yeah, some do both as well. Absolutely. Mm hmm. Some feel more comfortable making a cold call if they've already sent a piece of mail. And then they can have, like, more of a warm intro to be like, Well, I send you this mail and, you know, Did you get it? You know, that's like more of like a Oh, yeah, like they like to use that sometimes.

Joe: What if what if maybe on the second or third mail you send the seller an offer, then when you cold call them, you say, Hey, I'm just following up on that offer I sent you.

David: Yeah, that would be powerful for sure.

Joe: Oh, yeah. Love it. Okay, cool. Certain mistakes are things to avoid when using deal machine.

David: Biggest mistake is somebody will say this does not work in my market. My market is too saturated. There's too many people doing this in my market. And I'll go look at their account. They've added 12 properties, Joe. And I say, Well, it just didn't you didn't put enough work in to get any results, right? So a lot of times I fell victim to this as well. When I was first starting out, there was rundown house right outside my subdivision. I had the bushes so huge, taller than the house, couldn't see any of the windows because these things were just so overgrown. It looked rundown. I just sat there and thought about that house all the time instead of what I should have done is just found more rundown properties because they don't need to sell. They don't. They don't owe me anything. Right? Just because I found it doesn't mean they owe me anything, doesn't mean they need to sell it to me. But that's how I was acting when I just obsessing over this house. But I should have gone out and found more rundown properties instead of trying to convince them or like, you know, manifest it, whatever. So that's, that's what I would say is a huge mistake. A lot of people encounter is they get too hung up on these properties they find right by their house and think they deserve to get inside. You should just keep driving around new areas and find more rundown.

Joe: Yeah. Great way to get to get leads. And again, you could drive the same neighborhoods every six months and find new opportunities, can't you?

David: Yeah, cause like, one. One property I bought and then a tree fell while I was renovating it. The tree wasn't cleaned up for, like, two weeks. So new stuff like that can happen, and you don't know it unless you drive by it. So I finally got a hold of that seller and they sold me their house too. Thankfully, they had no idea a tree fell because the mom who lived there was with her daughter 2 hours away, helping out. You know, she'd just gotten divorced, had a baby. Her mom was 2 hours away helping. And she ended up just permanently moving in with her daughter and just wanting to get rid of this house. Did want to deal with a tree, don't want to deal with fixing the roof or the water damage that ensued. And so I got to buy this house from her and just handle all that aggravation for her. So that was pretty cool. Glad I was in the neighborhood, even though I had driven it recently to to take advantage of something new like that that had happened.

Joe: You know, I've done a lot of deals where I've partnered with other wholesalers and I'm thinking of somebody listening to this thinking Joe, I'm already so busy. I got my full time job. I'm trying to do vacant land and now you're talking about Deal Machine in houses and stuff like that. But here's what I'm going to be doing. My son and his friends want to make some extra money. I'm like, okay, we'll go drive for dollars for me. Okay. Go into I'm just going to go in and see what the hot zip codes are, where most of the investor activity is going, What is doing? I'm going to have them drive those zip codes, put the deals in the deal machine. They're going to come in and I'm going to we're going to send postcards to them. Any lead that comes in, I'm going to talk to that seller, negotiate with them over the phone, try to find out their situation where they're at. I have other friends who are wholesalers in Saint Louis. The last thing I'm going to do is get out of my chair and go look at houses. I, I don't like going to look at houses. They don't like meeting sellers in person. But you know what? I'm going I've got I know five other friends in the Saint Louis area that would love to go talk to sellers and go meet them in person. If I can get the deal under contract over the phone, I'm going to give it to one of them who they can then go meet with the seller, look at, you know, how much repairs actually needs to be done, build some rapport with the seller and then they can take the deal from there and then flip it and split the profits. 50/50, I've done I've made hundreds of thousands of dollars doing that by being the marketing engine, generating the leads, doing that initial prescreening over the phone and sending it to another local boots on the ground guy who then can get the deal under contract, who can then do all the work of getting the money, closing on it, flipping it has the tie, you know, has the contracts, has a title companies how does it private investors, hard money lenders already has all the relationships and then you can split those deals and then split the wholesale profits 50/50 done tons and tons of those deals. Then once you learn how to do it in your own backyard, what what's stopping you from that hiring, finding another wholesaler that's doing a lot of deals that wants more leads and say, hey, if I do your driving for dollars for you, and if I do the marketing and I prescreen the leads and send them to you on a golden platter, would you want to split those deals with me? Here's a cool thing about all of this. You can all be managed inside of the Deal Machine app, so you can make sure that you see everything that's going on and managing it. You can manage it all inside of the deal machine. So you're not actually the one doing all the work. You're not the one driving yourself. You're not the one that is going to the house to look at it. You're not the one who's trying to find the buyers or bring the money or find the title company. You can just hire people to do the driving for you and you can partner with local wholesalers that do all that work for you. Does that make sense? What I'm saying?

David: Oh, yeah. Makes sense. Of course makes sense.

Joe: I mean, David, when is the last time you went to go look at a house and negotiate in person with a seller?

David: Man, so I just started buying properties again. I bought like ten. I stopped buying them because Deal Machine took off and became the bigger moneymaker. And then I kind of stopped paying attention for three years and I went back and look, they appreciated $1,000,000 collectively over that period of time. Good for you. Yeah. So I thought, Damn, I should have had more houses, right? That would have been amazing. So now I'm going to buy houses. I'm closed on the second property this year from Austin. The house is in Indianapolis and I talked to the sellers on the phone and then I end up sending my handyman in to go meet them and just see what the condition of that verify the condition of the house, give me an estimate and then that's how I actually make my offers.

Joe: Cool. One other quick question I thought of, and I know we're running late here, so I'll hurry up when you can. Can you manage like this? This deal machine also acts like a CRM. Can you update the status of the leads in there? Can you track it all the way through? You know?

David: Yes. Yeah. Like a lightweight CRM features, right? You can update the status, you can add a note, you can add a task with the time. And so that's pretty much your CRM features that you got.

Joe: Does it integrate, for the techies out there? Does it integrate with Zapier? So I could send information?

David: Yes, it does.

Joe: So that just means like if it's in Deal Machine, you can zap it through Zapier to whatever CRM you're using Freedom soft. Maybe you're using Trello or Google sheets you can send in. In and out.

David: Right. Yeah, exactly. You could definitely sign information in. And that was safe here.

Joe: Okay, cool, man. Any parting words of advice? Anything I forgot to ask you about?

David: Yeah. So I would just say, like, the biggest mistake people make is they quit too soon. Like I said earlier, they think that it doesn't work in their market or they just get they just quit too soon. Right? And then they go do something random like Bitcoin. So, you know, definitely talk to somebody in your market that can tell you some numbers. Right. So talk to somebody who's getting deals, driving for dollars and say, well, how many do you think I should add? How many times you think I should mail them, how much you spend to get a deal and then double it for your first deal because you're going to have lower sales skills than them. So you need to account for learning. And so that would be my advice. We also talk to different customers around the country who are, you know, have gotten their first wholesale deals, made a big check from an ugly house on the deal machine real estate investing podcasts on Spotify and an iTunes. It's just started to grow the last few weeks, which has been exciting since we started just about six months ago.

Joe: What's it called?

David: The Deal Machine Real Estate Investing podcast.

Joe: Awesome. Nice. And so what do you do on this show? What do you do? You talk to what do you talk about?

David: Yeah, the show is actually my co-host is one of the most successful deal machine customers, Ryan Haywood. He signed 400 deals since he started in 2019, started with one of our 14 day challenges, got a deal for 8500 bucks. He didn't spend money to buy himself because he wholesale found a buyer. And so what we do is a lot of our listeners, they're they're kind of wanting to go from a job they hate to living the life they love through financial freedom. So to help get them there, we go over that proven business model of wholesaling real estate, how to find a discounted property and how to pass it off to an investor that has money and make a big check, you know, without risking a lot of your own capital. So just doing the exact same thing we talked about here and we talked to a lot of people who have probably done like ten deals and we really just focused on that wholesaling business model. We've had a few guests. They've done like thousand plus deals. But really we I think we found that people learn from people who are like right ahead of them, you know, and we focus a lot of our guests on that, a lot of that, because like, what makes us, I think, unique.

Joe: Do you still do those 14 day challenges?

David: We do.

Joe: No way.

David: We should do a 14 day challenge with you, Joe.

Joe: I want to do it. I was just thinking that I was going to ask you, what is your next challenge? And let's we'll talk about it offline here. We'll wrap this up here. But I think that's a great idea. I've done little challenges before. I call it like five leads in five days where I just you know, for five bucks, you join this challenge, we get into a Facebook group and I'm going to teach you how to get leads for free using, you know, little things online. But what if we did a challenge about driving for dollars and how to get leads quickly? Oh, I love it. It's a great idea. And you've done it before, so you know the best way to run it. All right. We'll talk about that. That sounds great. Stay tuned. But in the meantime, guys, if you like what we talked about here, go check out Deal Machine. Go to Joe McCall dot com slash deal machine. Get a free trial of it if you like it, take it around for a spin, see how it goes, and appreciate you, David, being on the show. Don't go anywhere. Hang on a bit. We'll see you guys later. Take care everybody again Joe McCall dot com slash deal machine we'll see you.

David: Bye, everyone. Thanks Joe.

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