How to Improve Your Lead Flow & Get Quality Leads w/ Drake Johnson

Mike DeHaan: [0:00] Really quick before the show starts, in case you haven't heard, we have a growing community of investors called the scale community, which is full of people learning to make massive income with their real estate businesses, so they can reach financial freedom a little bit faster than building a rental portfolio solely over time, because honestly, that takes decades and who has time for that. So if you're an investor who is serious about growing and creating a scalable business without needing to be a slave to it twenty four seven, then go to collectingkeys.com/scale and apply. And if you're a good fit, we would love to have you join the community. So again, collectingkeys.com/scale, go ahead and apply, and see if you're a good fit.

Drake Johnson: [0:38] The messy title, the affidavit of heirship, the, you know, you have to figure out a scenario where everybody leaves the house and where they're gonna go. When you look at that, you go, what's the price that makes it worth it to do all that work?

Mike DeHaan: [0:57] What is going on, guys? Welcome to today's episode of the collecting keys of real estate investing podcast. If you've been listening to us for a little while, you're probably gonna start seeing a couple of changes come around on these Monday interview shows. Basically, Dan and I got kinda tired of dealing with a lot of the, I don't know, like highlight reels, sort of unrelatable guests that we are getting on the show. Not that they were necessarily bad guests, but it just wasn't the direction we wanted to go when we originally started the collecting keys podcast, where we wanted to be focusing on actionable advice for people, like talking to real operators, learning how to actually build a successful real estate business. And so we're starting to make this change with these Monday interview episodes where we're bringing in smaller operators. I wanna say smaller, but, like, verified operators. A lot of them from within our scale community. A lot of them that we personally know are crushing it in this business. And our goal is going to be to dive into, like, what exactly they're doing in today's market, what do some of their systems look like, how are they hiring, what exactly is their involvement in these businesses that they're building.

Mike DeHaan: [2:03] So that the hope is that all you guys that are listening that are also trying to be operators, instead of hearing the guy that just happened to get rich in 2015 and get lucky, you're gonna hear about who's doing it in 2024 and beyond. And so for these episodes, it will be me and Dylan for a little bit. Might be Dan and Dylan every once in a while too. And we also have our first guest today, which is Drake Johnson. I think we did a couple deal deep dives with you or deal case dives with you, Drake, a little while back.

Drake Johnson: [2:33] Yeah. We did, I think, two shows together.

Mike DeHaan: [2:35] Two shows. Awesome. So very cool. But, yes, welcome back. And you've been a long time scale member. And for this episode today, I would love to dive into the growth that you've had over the last year because I know that you've seen a tremendous amount of growth in your business. I remember connecting with you like a year and a bit ago and you were fully in like that early grind phase. But get us started. Why don't you give us a quick little like two or three minute breakdown, who you are, where you're based, and what your team currently looks like?

Drake Johnson: [3:05] Yeah. Absolutely. Well, thanks for having me on again, Mike. I appreciate it. It's always fun to get back on with you guys and start talking about where you've come from and how far you've come. It's enlightening when other people realize that, and you don't even realize it yourself. So I appreciate that. Just a little background on me, Drake Johnson, primarily based out of Central Texas. So I'm nestled in between Austin and San Antonio. We call it the 35 Corridor or in Brownsville, Texas for anybody that's more familiar. It's a small town that's starting to become more popular in mainstream just because of its proximity to to really hot markets or what were hot markets at least. Our team right now currently is four. It's myself and my business partner, Andrew White. And then we have a full time lease manager and a full time acquisition manager. And we have a couple of offshore employees as well, but they're just not included in our day to day. We kinda use them as a contractor type basis.

Dylan Koch: [4:04] Yeah. Drake, so excuse me. I've been fortunate enough to know you too just from our accountability squads inside the scale community, so I get to see your success and growth on a week to week basis, which is great to see. Right now within your business, you just don't know how many team members you have, what primarily would you say is your role in your business? And if that alludes to, you know, what is you think your best fit, and where would you like to

Drake Johnson: [4:24] be with that? Yeah. Sure. So my primary role is sales, and then I also do some back end operations as well. Primarily, I have the three individuals underneath me would be our leads manager and our acquisitions manager. And then I would kind of take in the role of another sales guy, closer, that overseeing training, accountability of our frontline pipeline. So I guess to get a little

Dylan Koch: [4:48] bit more granular with that, let's say a lead comes in, and actually you can answer too, like, where you get most of your deals from. The lead comes in, walk us through maybe first phone call to where your your sales guy come in, lead manager comes in, or if you

Drake Johnson: [5:01] come in. Yeah. Absolutely. So first and foremost, we source most of our deals via direct mail. Our two best performing channels are direct mail and Facebook ads. So those are our primary ad sources. Then we have two full time co callers that do all outbound. But even with those outbound, they fill out webinar sheets, and they're actually submitted to us. So then they come in kind of as lukewarm needs as well, depending on the the criteria of the lead. So lead comes into our system. Before we had a an answering service, we actually nixed that because we had two full time people. Well, technically, with myself, three full time people available to take a call. And we essentially do a round robin. So if the lead comes in, the first thing it does is it goes to our leads manager. From the leads manager, if he doesn't answer, it would go to the act manager. If the act manager doesn't answer, it would pick up on me. In my experience, folks don't wait for the 15 rings. So usually, if it doesn't if they make it to the acquisition manager, it's a good day, the patient. And actually, believe it or not, it's a little bit of a litmus test too, because we know if they actually stay on the phone long enough for somebody to answer, they might have some motivation. So that lead will come in.

Drake Johnson: [6:12] It goes to our LM. From there, he will qualify the lead. We call it a qualification process, but I really, really have been pushing lately that we're shooting for a disqualification process. And what that really means is that we have essentially the four pillars. Most folks that are been in this business understand those those four pillars that really drive success in a deal, and it's motivation, condition, timeline, and price. If it has at least two of those, it will move on. When what we're actually trying to implement more so now in that early sales funnel are live transfers. So we have a qualified lead or at least discover that they could be a next step lead. We will live transfer that lead directly to the AM, and then it's the AM's job to finish qualification and either set the appointment or discuss your price expectations or even an offer on the phone call before moving on.

Mike DeHaan: [7:04] I really like what you said there about the disqualification questions. Right? Because I feel like one of the biggest objections we constantly hear or I would say challenges with newer investors, they always say, you know, oh, I don't have as that many qualified leads. But what we always try to explain, and, you know, and you guys both know this, is that, like, if you're doing targeted marketing especially, there's always something in the background that's, like, motivating. Right? If you're, like, they're on a bankruptcy list or things like that. And just because they're not, like, bleeding out on the floor when they call you, you know, and they're not saying, like, please come and take my house. Like, that doesn't mean that they're not a motivated lead. But, yeah, the disqualification process, that's huge. And then that live transfer as well, how do you pass it off from one person to the other? Like, in terms of that sales conversation, the the sellers don't get kinda, like, sketched out. They're talking to so many people on that first initial call.

Drake Johnson: [7:55] And is that a function inside of Ari Simply as a CRM that you use? Correct. So we have two software platforms that are really key to this. The first one is AriSimply. AriSimply did do a recent update that allows live transfers. The second one is actually we utilize OpenPhone, which is like an AI powered thumb system that allows us to do some, like, really targeted direct. And then we can also have forwarded numbers. That way, everybody on the team can actually see the call in progress. So that's very, very crucial. The LN, their expectation is as they call, he's setting the tone to let the seller know or whoever he's on the phone with a client know that he's the first step. His job is just an intake. Right? Then he sets it up for that next salesperson. So he will very clearly say, my job or my role in the company is to make sure that we are a good fit for each other upfront. Right? And to send you to the next step. And then it does two things. One, I make it a very clear I tell him that we will tell the clients that if they have seven to eight minutes, that's how long this phone call will last. So we make a, like, a really clear minute number on there, so they can start putting in their mind, okay, it's not gonna take long. The second thing is, again, you start to really get the same answers over and over again once you talk that off leads, and you can start to figure if that leads gonna be motivated.

Drake Johnson: [9:15] He then will give them a score out of 10 for their motivation, condition, price, timeline, amongst a few other criteria. And then if they rank above a five, he is noted to make a live transfer if applicable. You will simply say, hey. Listen. Actually, one of my my sales guys, he's actually here on the floor. I would love to be able to put you in touch with him because he's gonna be the one that comes out to the house or even be able to make an offer to you. Do you have a minute? And I can see if he's available to chat with you. And if they do, then he'll live transfer. If they don't, he'll set up an appointment for them to do so either later that day or on another day that they see fit.

Mike DeHaan: [9:52] Nice. I like that. It's a great way to, like, just capitalize on that speed to lead. I know I've heard about other people doing things similar, but instead of basically teeing up the acquisition manager to be on the phone like that, their version of it is they're like, hey. Or I can be there at 03:00 this afternoon. Does that sound good? And so they're doing, like, the speed to lead really quickly on on-site, but yours will be much more scalable. You need to iron that out because you don't have guys freaking just driving all over the place for no reason.

Dylan Koch: [10:18] Is your AM getting a quick debrief from your LM then on, like, the situation? Because I doubt they're just going in blind. Correct.

Drake Johnson: [10:25] Yeah. So sometimes, you know, it's definitely a little bit of an obstacle. Right? But so even even he does it to me. And he did it to me this morning, and it was a foreclosure lead that the guy's his house is going to auction tomorrow morning. So he goes, hey, Drake, this is so and so. You know, he's got a house at x y z history. He needs to sell in thirty days. He's just reading off his notes. And then as soon as he's done with that call, he's transferred over. He immediately puts notes into our CRM in the Slack channel for a leads info. And then that way, as I'm on the phone, and I always start the conversation with, hey, Mike. This is Drake. Hey. Listen. Kevin just he just sent you over to me. And please forgive me because I was actually working on something else, but I turned all my attention to you. So if I ask you the same question, I do apologize. And as soon as he's got some notes in here, I'll read it off, and I'll be good to go. But I just have a couple more questions for you.

Dylan Koch: [11:14] Yeah. That's setting an expectation. I can will be key, I'm sure.

Drake Johnson: [11:17] Yeah. Yeah. 100%. A 100%. And then at the end of the day, it's like, we're human, and they're human, so just tell them.

Dylan Koch: [11:23] Yeah. No. It makes sense.

Drake Johnson: [11:24] Like, I don't know why people have such a, like, a process driven, like, if this, then that. It's like, that's great. Have that. But at the of the day, understand that you're a human. They're a human. Just have a conversation with them. Is there any data behind before

Dylan Koch: [11:37] you did live transfers to doing live transfers on my conversion rates, or have you not

Drake Johnson: [11:42] been doing it maybe long enough to to dig into that? No. 100%. So I'll tell you, in terms of data, I mean, it's kinda hard. I would have to pull up to see, like, what appointments were actually kept. But in my experience, since we've been doing that, our conversion, at least to an appointment, has more than doubled. Awesome. Because we're actually keeping those leads on the phone. Like, what we've noticed is that when people get off the phone, good luck getting them back, especially if they're not super uber motivated. And it's just because they're gonna hang up with you, and then they'll call the next person. Yep. You know, you're you're a sharp out of water at that point.

Mike DeHaan: [12:19] Yeah. 100. I mean, every time that there's a transfer between individuals or from conversation to conversation, there's a chance for the deal to die even if it's, like, under contract. Right? That's why you always wanna be efficient going through, like, that closing process. You're not having to do 18 different follow ups with sellers. I wanted to go back to what you said about lead generation. You said you're doing Facebook ads for sellers. I think you that might be one of the first people I've heard in, like, a while that's actually, I would say, doing that well. I know we do it for, like, retargeting purposes. So, you know, when people go to our websites, they'll get retargeted. But you're doing, like, cold Facebook ads for sellers, like, effectively.

Drake Johnson: [12:57] No. I mean, I wouldn't call it effectively.

Mike DeHaan: [13:01] You're spending money on it, but okay. Yeah.

Drake Johnson: [13:04] Well, so here's the thing. Here's the thing. This is what we found is that they have the biggest they were some of our biggest deals. So it's it was kinda like so for me, personally, on our market, we hated texting. Like, I never had good success with texting. We did one deal off texting. We did texting for almost a year and had hundreds of leads in our CRM from texting, and they were all tire kickers. It was by far the worst marketing channel we have ever done. And it was very, very, very frustrating because people were it might have been in a weird time too where, you know, texting was just starting to kind of fall off the cliff a little bit and get really hit by carriers, but people just seemed like they were just fed up with the text. And, you know, we would get sent over things where if somebody said, yeah, make, yeah, a million dollars, all of a sudden, now it's elite. And we're like, I don't even wanna call this person. Right? So we would text them back, nothing. Call them, nothing. Point appointments, hey. Listen. I just responded to a text, man. I'm not that interested. You know? So it was like low barrier of entry, but also low motivation. Facebook ads, they actually have to see the ad, fill out the form, then they get automatic drips. So they get a Zapier integration where they get an automatic email, an automatic test message, and then we also treat Facebook ads as speed delete. So then our goal is to be reaching out, calling that person if it's within business hours, a reasonable time, within five minutes. So they get all of that. All of a sudden, now it's like, this is not that bad of a lead, and it's Facebook.

Drake Johnson: [14:33] So when you think about a lot of our targeted clientele, where do they spend? Where do older folks spend most of their time? It's on Facebook. So they see our ad, and they reach out.

Mike DeHaan: [14:44] Yeah. Five minutes is impressive. I mean, if you're getting this stuff that quick, that makes that makes a lot of sense. So, like, what are your ads doing? Are are you I mean, I don't know. You used to be a firefighter. Are you, like, in there, like, topless Absolutely. Calendar shoot trying to get the the older lady sellers to inquire?

Dylan Koch: [15:01] And if people can see Drake, they that that make more sense. He works out six like, eight days a week. So

Mike DeHaan: [15:06] Yeah. He's, like, 3% body fat, you know, on a bad day.

Drake Johnson: [15:09] Carrying an axe and a hose in between my legs Yeah. Just the suspenders going. It's a show, bro. It's a show. My partner, Andrew, he has a pretty successful Airbnb business and get a marketing, a VA. So she handles the Facebook ads, and then she just revamps them every month. We actually had a agency that was doing it, and it was not successful. It's a lot of, like, generic stuff. So what we actually started doing is we started sending more of our deals. Like, so actual properties that we'd locked up, what they look like, what they send. She was revamping, and then she actually, like, gave targeted feedback, bit by KPIs, marketing KPIs based on who is opening them, who's looking at them, who's the target demographic, was they on a mobile phone or a desktop, what their age range, what their gender was. And then you could see of the four ads that we ran, which one was successful. And, you know, it was almost like the beginning of Facebook where it was very lucrative because it was cheap and everybody could run Facebook ads. Now it seems like everybody kinda fell off. So the people that are still running Facebook ads, it's just one more place where somebody could find you.

Mike DeHaan: [16:12] Sure. Yeah. Yeah. That's he has to, like, kind of train that audience because it gets weird with real estate stuff. So we we dabbled in Facebook ads for a while, like, years ago, But the problem was is you would always get slapped because there's all these rules around running ads for anything, like, real estate related.

Dylan Koch: [16:25] Same thing with Google Ads too.

Mike DeHaan: [16:27] Same with Google Ads. I know. It's for all the anti discrimination stuff. But nice. That's cool. So how many deals are you doing a month per now on average?

Drake Johnson: [16:35] Yeah. So we got into this weird spot, and I'll probably talk about this a little bit about, you know, Ashimovi talks about the the woman in the red dress. Right? So in terms of one business where it's this is a marketing and sales business, and the other side, it's like, okay. Well, we also do some flips. Separating those two is difficult. Like, right now, we just last week, we closed on two flips or two whole tails. Right? And what I noticed is when you put your head down and you look up, you realize, like, I'm chasing the girl in red dress again. So right now, our goal with just the marketing and sales side, so the wholesaling side, is one to three transactions a month. Or excuse me. The goal is three to five. Realistically, it's one to three. And then we're taking down anything that looks like we can two to three x our wholesale return.

Dylan Koch: [17:21] Yeah. I like that metric. I have a similar one as far as, like, wholesale and flip. Also, the nuances of how big is the project, like, kind of those kind of things that go along with it. But okay. So you're doing one to three deals a month. Anything related to, like, what you are spending for on marketing, whether through those two channels that you mentioned?

Drake Johnson: [17:39] Yeah. Absolutely. So right now, our total marketing budget is about 12,000 a month.

Dylan Koch: [17:45] And so that's that's respectable.

Mike DeHaan: [17:48] Yeah. So, again, a good month, I mean, if you're getting three deals a month off that, that's the $4,000 average that we've seen talking to very large operators nationwide. And we're we're about the same. I think ours are kinda busting off 4,300, but little bit high right now. But the funny thing is is as we we talk to so many people, those numbers always kinda stay the same. And, I mean, for you, you know that you can go and increase that and probably get more opportunities. It's having the infrastructure behind it to actually be able to capitalize on it when it comes through. Yeah. Especially when you're when you're doing wholetails and flips. How are you funding everything? Is it hard money?

Drake Johnson: [18:21] Hard money and private money. We actually recently ran into it. Mike, I mean, we even reached out to certain lens a lot. Right? You know, but two deals right now just pretty much maxed us out. So we did both halves an equal share of private and hard money so that we could keep our operating budget. What we realized is, like so for example, one deal, our capital ask was, like, 120,000. And, you know, that was that was pretty easy to wipe out most normal small business operating budgets. Right? So when we're talking about holding costs of almost $8,000 a month on one property and a $12,000 a month budget for marketing, you're looking at $20,000 a month. Not to mention the time cost. Right? So as soon as you take on a flip, all of sudden now you're coordinating landscaping and painters and cleaning. I have. Yep. And before you know it, like this morning, I spent three and a half hours just driving to the house we just bought. So how can you effectively manage your wholesale pipeline when you're spending 20 to 30 hours a week on your upside?

Mike DeHaan: [19:20] So That's the tricky part of this business

Drake Johnson: [19:22] Oh, yeah.

Mike DeHaan: [19:22] Is balancing that. You're you're in, like, that that funny middle stage where, I mean, you have a lot of opportunity. You're still trying to figure out kinda how to hire because, like, you're also in a position right now where you could hire poorly and it

Drake Johnson: [19:36] would probably

Mike DeHaan: [19:36] take you down for a little bit. Whereas, like, the benefit is once you push past that is, like, I can have an employee that sucks for, like, three months, and it doesn't change anything. That's a great point. You know? But when you're really, really small, it's very, very hard. Yo. If you don't follow me on Instagram, which is at mike underscore invests, by the way, then you might not know that we officially have a new mission as a brand, and that is to help 2,000 real estate investors build million dollar businesses. Obviously, to do that, we need to get in front of as many people as possible. So quick little ask to help us reach that goal. First, shoot me a follow on Instagram at Mike underscore invests. Second, follow collecting keys podcast on Instagram. That's at collecting keys podcast all written out. And third, every time the algorithm is kind enough to show you a post from either of us, share it on your story, or in your post and tag us. If you do that, I'll DM you and we can have a little DM conversation about what is preventing you from having that million dollar business that everyone is seeking. And we can see if we can come up with a plan to help you make that massive income, not just passive income.

Mike DeHaan: [20:43] So again, if you see any of our posts, just go ahead, reshare them, tag us, and let everyone know that you enjoy the content we produce. It will help us a ton, and then I'll be happy to help you as well. You have some, like, higher price point stuff too. Think the one that you reached out to us for for lending was, like, $66.50 purchase.

Drake Johnson: [21:00] Yes. Yeah. So we ended up being just under 700 all in. Yeah. I mean, two flips that we have are over you know, we have over 1,000,000 out in loans. So it is a higher purchase points. And that's another thing too. Like, our deals our average deal sizes each are over 20,000. I think we're at, like, 22, 23,000 per deal. So, you you know, marketing is more deal flow or deals are more deal flow, however, is not nearly as high. Except we did start getting some of our teeth into some South Side San Antonio deals. We're under 200,000. But in a weird way, we have a really, really, really good relationship with our title company. Like, if I could say one piece of advice for anyone is have a first name basis relationship with your title company because they are so helpful. But, you know, we talk to them all the time. Hey, what what transactions are you guys doing? Who's buying right now? They'll put us in front of buyers, lenders. They give me a list of banks that have really friendly lines of credit for business owners, small business owners, and they'll tell you what's moved and shaken. They're the ones doing all the transactions. And she Nicole, our our title escrow officer, she says, hey. Under 200 and above 900. That's what's selling right now because they're absent of interest rates. They're all cash usually. You know, under 200, you have pretty much anybody.

Drake Johnson: [22:18] I mean, you know, not to be demographically based, but I'll just say it. Under 200, you have a heavy South Side San Antonio Hispanic population where they save a lot of their money, and they don't need loans. So they will buy homes. And then above 900 is you have, you know, upper middle class or upper class wealthy individuals. We actually have a statistic here that between seven hundred and fifty and nine hundred or so is that weird flex space where you have entrepreneurs, business folks, doctors, lawyers, those high end wealthy folks that are actually will still buy because they don't necessarily get affected as much by rates as what your your middle class and your your average price point market would be. Totally makes sense.

Mike DeHaan: [23:01] Yeah. I think it's the same everywhere. Do you see the same thing where you're at too, Dylan? We definitely have that here in Spokane.

Dylan Koch: [23:06] Yeah. No. And I think if it's, like, you know, the wealthy class areas are like, hey. I just want the house. I don't really give a shit what the rates are. And then, you know, the ours is probably, like, anything under 200, honestly around 200, probably close to that, maybe a little bit lower. It's just like the first time homebuyers coming in FHA, they just got done renting for a while. And so there's like, just want to buy a house there or like, they got married or they had a kid. Like, it's just a life events that happened. That is a natural cause of moving.

Mike DeHaan: [23:34] Yeah. Yeah. Here, it's basically like the under $3.50, your golden, because that'll be starter home price range around here and people will buy those. So when you get into like the 400 to, like, $6.50 range here, that's, like, the danger zone. Like, those houses will sit for freaking months because the people that can afford the nicer stuff, they're gonna splurge on the $800,000 house. Right?

Dylan Koch: [23:55] And they're probably the most inventory anyway. Yeah. Right? That's probably the most amount of that people have

Drake Johnson: [23:59] to choose from. So Or here's the caveat. It will sell, but I it says the three criteria is what I call it for if something's gonna sell at above that those price points. It's location, quality, and price point. And if you hit those three, it'll still sell. So, like, for example, we have the two flips that we're doing. We're gonna be undercutting the market by 50 to $75,000 easily. People will

Dylan Koch: [24:23] be swearing your name, but your place will move.

Drake Johnson: [24:25] Exactly. We'll be the best price, the best location, the best quality product on the market in those locations. So if there is a buyer, they're gonna buy it. Yep. Makes total sense.

Mike DeHaan: [24:34] It comes down to what the value. I think that's the old Warren Buffett saying is the price is what you pay, the value is what you get. You know, you have to have a high value product now more than ever, and it's your job as the, you know, the flipper, the provider to

Drake Johnson: [24:47] be able to to give that. Yeah. Absolutely.

Dylan Koch: [24:49] So, Drake, too, and then, like, you know, we are we met each other first, actually, at the first KeyesCon and inaugural KeyesCon event. I've gotten to know you over the years, follow you on social media, I know that you also have this stoic mindset, trying to balance everything. So my question is how do you balance growing the business, hitting your goals, having a social life, staying in shape, all those things? Like, do you have any tips or advice for our audience in that regard? What? You guys have social lives? I mean, not much.

Mike DeHaan: [25:20] My social life is I have two social outings every week. They're on Tuesday at 11AM Pacific and Thursday at 5PM Pacific. Yeah. The scale community. There you go. It's my social club every week, and that's

Dylan Koch: [25:33] about it. Well, Mike has his non negotiable. Right? Like, Mike will work out at least what, an hour a day, every day. You know, I think everybody needs kind of an outlet. You know,

Drake Johnson: [25:42] just Yeah. Touch on that if you

Dylan Koch: [25:44] Absolutely. So Oh, Sorry not to interrupt, but you have a full time w two as a firefighter for the audience. So it's like your time is very constrained.

Drake Johnson: [25:51] Correct. Yeah. So for perspective, I work 53 a week with about an hour commute both ways. On average, it it ranges fifty six to fifty seven hours a week. Now caveat to being, I also sleep there. So if you're gonna count the sleeping hours and all that, then, yeah, fine. But it does take me away from the business. It is a it's a non negligent time. On top of that, pretty much everything that I do is focused around building this business. I'm gonna say something that's probably unpopular is it doesn't fucking matter. You just gotta do it. And the stoic aspect of the mindset is that it is hard. It's supposed to be hard. Therefore, hopefully, you will be better than everyone else. I have to tell myself this on a daily basis because there's plenty of nights where I'm watching paint dry in my room at night going, I don't know what tomorrow looks like. But, you know, I think that's also the difference. Right? Like, a lot of people talk about the last ten years of real estate being the perfect run up, and I'll admit, I got lucky. My first few transactions were incredibly successful, but then everything after that was like a uphill battle. And, you know, it's it's not to be corny, but it's carrying that cow up the hill.

Drake Johnson: [27:06] And as the cow gets bigger, you get stronger. And I'm really, really hoping that's the case. There's no balance, man, to be short. There's zero balance, sir. It's it's just right now, this is the time. This is the season where this is my primary focus. And I think a lot of people miss that when they're building their businesses. They're like, well, I need time for this and this and this. It's like, no. You don't. Just shut up and build the thing. And then once the thing is built, then you can transition to a different season.

Dylan Koch: [27:35] Yep. I mean, just listened to a Hormozi podcast today. Not that I'd go off a tangent about him, but he's basically like, hey. The top salespeople, they spend the most time working. The most successful people, they spend the most time working. The people who are ahead of you will tell you don't stop. The people below you in progress will say take a break. Like, this is it's what it comes down to.

Drake Johnson: [27:52] Yeah. I love that mindset. I love that mindset. And it's the people that say you don't have to work that hard or four hour work week or one hour of focus a day or this and that. It's like, are those really the people that built the world? Like, seriously. You know, it's like, I think, like, for how we live now, it's fucking easy. And maybe maybe if we just make it a little less easy, you know, that's like the working out. Like, that's like doing these things, the hard stuff. I think those are the things that ultimately gonna find you later in life. And I wanna be known as a person that worked hard, you know, and got the result, not just because, but because that's just who I am. Totally.

Mike DeHaan: [28:32] I like that. And and I'll be honest, Drake. My hope by having this sort of question mixed in on this particular show every week is that I'm gonna keep getting answers just like that Because, like, that's the reality of it. You know? And so often, you listen to these other forms of media, or you see on social media, or you go to these different entrepreneurial groups, all sort of stuff, and you have the guys that are like, oh, well, I have, like, schedules, like, but I still never miss a soccer practice. I'll never do these things. It's like, yeah, that's because you're already rich, dude. Or it's because you're not that rich and you're pretending like you are. Yeah. You know? Right? They're either, like, already above and beyond everybody else or they're completely full of shit. And there's like, if you're in that grind phase, I and really like the way that you put it too, like, that's just the season that you're in, and that's okay. It can go on for one year and go on for five. But either way, if you're intentional about growing and moving things forward, eventually, you can graduate from that. There will be sacrifices, but that's the trade off that you make. You know, that's the old saying of you gotta, like, choose your heart. Like, life is gonna be full of regrets. You gotta pick which regrets you're gonna be okay living with.

Drake Johnson: [29:33] Awesome.

Mike DeHaan: [29:33] Well, very, very cool, Drake. Alright. So we're gonna dive into the end of show couple of questions here, but I really appreciate all that you shared, man. It it's really cool to I would say from my perspective too, know Dylan's seen you a lot. I've had a few, like, longer form conversations with you over the past couple of years, but it's cool from my perspective seeing, like, the maturity that you've developed with your business since I think even even last that we kinda just spoke one on one. So good for you, man. Thank you.

Drake Johnson: [29:58] Appreciate it.

Mike DeHaan: [29:59] But yeah, buddy. To dive into our end of show questions here, we gotta keep up with the classic. And so I'm not sure if this will be the same as one of your deal case studies that you shared a little while back. But what is the craziest story that you have from your real estate business so far?

Drake Johnson: [30:15] Alright. So I don't know if you guys are gonna be ready for this one, but this one this one tops it. Okay?

Mike DeHaan: [30:21] Oh, man.

Drake Johnson: [30:22] It was actually very recent too. So we got a a direct mail lead. A gentleman called in, and he was super motivated. He goes, you know, I need to sell my house tomorrow. And they're like, okay. In my mind, the people that are the most motivated typically can't sell or there's something there's some kind of red flag. So my mind, the early part of me was like, oh, yeah. Let's go. I gotta get out there tomorrow. The new part of me is, let's ask a couple more questions before I jump off this cliff. And sure enough, it started to play out. So it was a small, like, little hill country town here in Texas. It's called Wimberley. I went out to visit the gentleman. His only motivation to me was I need to get the f out of Texas. And I said, okay. That's weird. And he goes, I will sell it to you for what I bought it for in 2017. I was like, strike two, buddy. You're you're getting really close to strike three. I show up, and I immediately just text the guys on the team. I'm like, hey. I'm at this address. If you don't hear from me in an hour, like, SOS. So I I show up. I park my truck, and, like, and immediately, all the signs. Four cars in the driveway, four cars on the lawn. The windows were knocked out. The tires were flat. Like, there was shit all over the yard.

Drake Johnson: [31:41] And I was like, okay. This is gonna be interesting. And I get up, and I start walking up to the front door, and, you know, I I had a background in the military, so I was slightly cautious, and I'm not gonna rush right into that. And the door's already propped open. I was like, okay. They're expecting me, but I was early. I was, like, twenty minutes early. So I was like, this early? And all of a sudden, just see, like, somebody shoot past the door, and I'm like, what the what was that? And then a voice comes in from inside the house, and he goes, hey, man. Come on in. And I'm like, no. I'm good, dude. I'm actually gonna stay out here. Want you to come out here. I wanna see the outside of the house. And then I was not ready for what I saw. There's a gentleman that walks out the front door. He has no arms. No arms. At the elbow. At the elbow. No arms. Tattoos all over his entire body, including his face. He's got, like, an ice cream cone under his right eye. He's got two two gold teeth, and they're his front two teeth, and they're long. And he's got long hair and basketball shorts and socks. Is it bad my first

Dylan Koch: [32:44] question is how he caught you?

Drake Johnson: [32:46] I'll get into that. I'll get to that. So he comes out, and the first thing he does is lift up his elbow to give me a fist bump. And I was like, I don't know what to do here. So I fist bumped his elbow. And I'm like, yeah. I I thought about it, and I was like, nah. I'm a give him this the LDs to dApp, to respect dApp. So I say, what's going on, man? And he just starts spilling his guts. You know? I need to get out of here. This, that, and you know? I got six tears. I got this, that. I'm like, okay. Okay. I was like, alright. Well, the house doesn't look terrible. Let's go inside. And you and I walk inside, and it's really dark, but you could tell he cleaned up. So was like, okay. He started to be a little more optimistic. And he takes me around the corner, and I go around the corner. I'm like, how many people are in here? He's like, had a couple people. And in the corner of the room is, like, the largest human being I've ever seen in my life. All the lights are out. Right? There's no AC, and it's, like, 98 degrees already. He's six five four hundred pounds and starts walking towards me. No shirt, extremely overweight. And then I look in the room, there's five kids laying on a mattress. There's another girl sitting on a couch, and they're like, what do you think about the house? And I'm like, it's unique.

Drake Johnson: [33:54] Yeah. I'm I'm gonna take a look, and I'm gonna tell you exactly what I think is best. He starts taking me around the whole house. They converted the garage into a two bedroom. They converted closets into bedrooms. In every single door he opened, there was people and dogs. There was 15 dogs and 22 people in a four bedroom, three bath, 2,000 square foot house. No AC in the middle of summer. All you smelled was dog and BO and sweat, and a guy with no arms just walking around telling me that I was a savior from God. So did you buy the house?

Mike DeHaan: [34:30] Man. So

Drake Johnson: [34:33] we're we're actually still in talks with him, but we just I think we offered, like, 20¢ on the dollar just to, like, it was one of those where it was, like, an offer to him. Was like, I hope you say no. Like, I don't even wanna deal with this. I said, dude, what's gonna happen to all the people? And he goes, they're going with me. And I was like, to where? He goes, Chicago. And I go, how? Like, how?

Dylan Koch: [34:52] You guys just gonna caravan with 27 people and 15 dogs back to Chicago? It was it was insane. Those are the one, like, good on you for, like the it shows you're a real operator, you noticed at the beginning, like, this is probably, like, red flags. And then two, like Mhmm. Those are the hardest to dispo. Let's say you got under contract. They're a nightmare to get other people through those. But go ahead. Sorry.

Mike DeHaan: [35:15] I was gonna say, sounds like an episode of like American Horror Story, like, where they always have to have, like, the ridiculous characters and scenarios that make no sense at all. But that's, yeah, that's wild, man.

Dylan Koch: [35:26] I will want a feedback. Yeah.

Drake Johnson: [35:28] I know what that deal ends up doing, but I will let you guys know. They they did say I I think the the property appraised, it was interesting because I found two lots. It's a huge house in the neighborhood, and it's in a nice area. It's, like, eight minutes from a downtown vacation town. So very optimistic. But in the grand scheme of things, the obstacles there, that's the one thing we're learning, like the messy title, the affidavit heirship, the you know, you have to figure out a scenario where everybody leaves the house and where they're gonna go. When you look at that, you go, what's the price that makes it worth it to do all that work? Because I know that it's gonna be a laundry list of stuff, and I'm not doing it for 15 to $20,000 wholesale fee. I'm just not. Like, it's not worth it. Totally.

Mike DeHaan: [36:11] I mean, just the humanitarian effort alone would be huge.

Dylan Koch: [36:14] Yeah. One other question for you real quick. If you go back to the very beginning of your building your business journey, what's one thing that you would do differently?

Drake Johnson: [36:25] Yeah. It's kind of ironic because we talked about it in the beginning, but it's like chasing a woman in the red dress. I know when I first started, I had a really particular thought process around being called a wholesaler. Like, at that point, it just really bothered me, like, perception of it. I find myself to doing above and beyond type of activities and trying to be as professional as possible, And the that it was my own problem dealing with, but folks calling me, oh, so you're a wholesaler. That's what you do. It it was kind of like them saying you have no skin in the game. So I was trying to fix and flip, and we're looking for Airbnb's for Angie's portfolio, and we're just trying to do too much at two at once. And and then we're I was focused on, you know, all the processes instead of just going, what's gonna actually drive sales? And it was something I actually wrote down on my computer every single day and said, how many conversations are you having per day? And it's something I talked to Mike and Dan about all the time. I said, hey. Well, if you broke this down Barney style, how many conversations do you need to have before you hit a contract? So if I had to go back to the very beginning, my whole day, 90% of my day would be spent on the song talking to sellers, talking to buyers, building relationships, and actually doing the business instead of pretending to do the business. And I know that's so cliche, but it's just true.

Drake Johnson: [37:42] Like, you spend so much time doing a system or process, a CRM, this, that, and the other, and you look down, you go, how much of my time was actually spent in revenue generation mode? It probably wasn't that much. So if I had to redo it all again, my primary focus would be sales and marketing, and that's it. That's all I would focus on until we were up and running, and then I'd focus on all the other stuff.

Mike DeHaan: [38:06] Yeah. I imagine as we continue to do these, that will probably be the most common answer to that because you're completely right. Like, people tend to go towards the things that I would say, like, feel the easiest, especially when you're kind of uncertain and you're really in that grind mode and you don't know when you're gonna be making next bit of money, which is kind of like a high stress situation. And for most people, I'd say 99% of the people, those things are not revenue generating activities. Right? Because calling the sellers is hard. You know? Going and doing your long term follow-up, calling eighty eighty people in a day just to get hung up on 75 times. Like, that's really hard to do, but that is where the real opportunity comes from.

Drake Johnson: [38:43] Absolutely. Absolutely. And you build so many valuable skill sets in that avenue of your business. Like, the amount of conversations that you have and what the conversations consist of, you're gonna learn more about real estate those conversations than you're ever gonna learn from other people, courses, coaches, etcetera. Those things help, but they have to understand is that, like, 80%, 90% of your time needs to be spent talking to buyers and talking to

Dylan Koch: [39:08] sellers.

Mike DeHaan: [39:08] Cool. Awesome, Drake. Well, I really appreciate the time, man. Where can people find you, follow you, and reach out to you?

Drake Johnson: [39:14] Yeah. Real simple. The Drake Johnson on Instagram, Drake Johnson on Facebook. That's pretty much where we go, and obviously, collecting keys.

Mike DeHaan: [39:21] Cool. Right on. If you guys are in San Antonio, you should definitely reach out to Drake, because I'm sure he'd love to do a deal with you. Do you wanna talk about your meetup down there at all? Are you

Drake Johnson: [39:29] Yeah. So we've been doing a meetup for just over two years every single month nonstop. The plug is Pines and Properties in San Antonio. It's a Weathered Souls Brewery. It's in the back of the the brewery gives us the whole back, and we have a different operator come out every single month. We have nothing to sell. It's all about value and bringing in the community. We have a Facebook group, Pines of Properties, San Antonio. And we've actually done a ton of deals with people in there, and we've actually got really good relationships from people that shows up in networks. So yeah.

Mike DeHaan: [40:00] Cool. Right on. Well, if you're in San Antonio, can check that out. Otherwise, just hit up Drake on social media as well. So, Drake, man, really, really appreciate the time. And, everybody, we appreciate you guys listening. Go ahead and share this with your other friends that are operators and trying to figure out to grow their businesses. Drake dropped a bunch of great knowledge here that you can definitely take away that was super actionable. Talked about how he does the hot transfer. He talks about how they are disqualifying leads rather than qualifying them, which I think is a great spin on things. And also how he's even doing social media ads, which I haven't heard about being that successful before. So really good job for you, Trey. But share it with all your operator friends, everybody. We appreciate you guys, and we'll talk to you guys next week.