Is Cold Calling still an effective way of finding off market deals?

Dan Austin: [0:02] On Air Brands. Continuously build a rapport because you're cold calling them. They're picking up the phone. They're not calling you. They're not reaching out to you. You're gonna have that extra time building rapport because they gotta trust you first. I mean, they're talking about selling their house to you, and you're some random person that just called them. That seems weird. And so, building that trust and rapport is is huge, and that's why it takes so much longer, to get them to come around to that idea.

Speaker 2: [0:28] Welcome to the collecting keys real estate investing podcast with your host, Mike DeHaan and Dan Austin. From wins, losses, horror stories, and tactics for optimizing your business, Mike and Dan take a real uncensored deep dive into the ins and outs of running a full time real estate investment and wholesaling business.

Mike DeHaan: [0:52] What's going on, guys? Welcome to episode 33 of the collecting keys real estate investing podcast. I think we finally have some things moving forward. I feel like for the last little while, we had a bunch of projects that were kind of just in limbo or Stale.

Dan Austin: [1:09] Just stale. Well, it wasn't No.

Mike DeHaan: [1:11] We weren't

Dan Austin: [1:11] in limbo. It's just that we had so much coming in that we couldn't the wheel wasn't spinning fast enough.

Mike DeHaan: [1:17] Yeah. Well, this is kind of the problem too with just, the labor issue everywhere Mhmm. Is we end up closing on all these places because it makes more sense than wholesaling them or they're kind of like unique properties and it's difficult to wholesale them. And by by by unique, I mean, have tenants. And here's one thing, if you're gonna buy a property, like you wanna invest in real estate during a housing shortage,

Dan Austin: [1:38] you have to learn to buy with tenants. Yeah.

Mike DeHaan: [1:40] Honestly, the biggest issue that we deal with all the time is people not having somewhere to go, whether that's a tenant or homeowner. And if your contingency is that the property needs to be vacant, that's not gonna happen Yeah. Just like lickety split anymore. There's gonna be a process there. We're always willing to help out, but there's so many people that are like, well, there's gonna be a tenant in there. You know, I'm not gonna handle it. And we we literally just did a job where, you know, no one would touch it because there was a tenant. We closed on it. We went to tenant, like, hail you $1,500 to leave. And she was like, okay. And she left. Bye bye. It was really easy.

Dan Austin: [2:13] It was really easy. Yeah. You know, I had a listing that reminds me recently this year, where there's a tenant in place, signed around deal, got the contract signed, everything's moving forward. And then the agent starts getting, like, weird. And she's like, well, what about the tenants? Are you guys gonna make a move out? I'm like, that's not in the contract. You know? Yeah. And then, like, just kept beating on. She's like, what's the property manager's number? We need to talk to the tenants. Like, all this sort of stuff while we're signing. It's like and and she was buying for an investor who was doing kind of a traditional MLS deal, 25% down type thing. And I was like, you should have asked those questions before you wrote the offer for your client. If they're not into dealing with tenants, you just got your client into a bad situation because, yes, there are tenants and you knew that. Granted, I had issued, the ninety day notices intent to sell. So they you know, and I put that in the listing. And so it's like, yeah, people get so uneasy, but it's like, you're right. If you're in a housing shortage situation and you want to do deals, you're gonna have to eventually deal with tenants, and sometimes those are

Mike DeHaan: [3:11] the best deals. I know. Yeah. It's yeah. It's just it's just silly. And it seems to be such a reoccurring thing. And I understand, you know, it can get messy. You have to evict somebody that can get really expensive, get really complicated, all that sort of stuff. But from our experience coming up on I think we're actually about to cross 100 deals. We have had issues with that a handful of times, maybe like two or three. So that's what 3%? Yeah. 2%, you know, and we have we've sold some with tenants last year to various people. We had one buyer that we sold a lot to who was more willing to buy with tenants before they kind of just slowed down their business a little bit. And they had they've had one major situation with tenants that got really out of hand. Mhmm. Where like some crazy stuff happened, like the the tenants showed up at their office.

Dan Austin: [3:58] Yeah. That is a bad deal.

Mike DeHaan: [4:00] But that's an extreme situation. You know, that's not the norm. And like, I honestly, I think that people are just afraid to be the bad guy. Right. And, you know, they have but but like, this is just classic I don't know. This is a classic view among people right now is it's like, I recognize that this is a problem, but I'm not gonna handle it. So I'm gonna make someone else do my dirty works, then I can just benefit. Right. That's also why those people aren't getting that many opportunities.

Dan Austin: [4:25] Yep. Yeah. And we we did the, cash for keys episode, I don't know, a week ago, two weeks ago, and, like, just look at look at the deal. Look at the numbers. Look at the, carry costs you're gonna have, and then balance that out with the cash for keys deal, and then look at your most extreme worst case. Maybe your most extreme worst case is as you run them out three months and you spend another $3,500. Okay? Put that in your budget. You know? I mean, like, look at it. Most times, like, when we're sending deals out, we're gonna factor that in with the tenant. We're gonna understand that as a potential risk for our buyers and recognize that. We're not just gonna try to throw you throw you to the wolves with some crappy tenant situation because we've dealt with them too. We understand the situations, and we generally do a pretty good job dealing with that before we send out a contract. And so yeah. Enough said.

Mike DeHaan: [5:09] Enough said. Yeah. Exactly. But, you know, what you said so what you said before, something else that I've been thinking about a lot is with these realtors. So so we have these lake cabins, these little ones that we bought a while back.

Dan Austin: [5:21] We did get a cash offer on one. I like that.

Mike DeHaan: [5:23] We did get a cash offer on one. Yeah. And so, you know, we we we one of them fully fixed up and listed, got a cash offer on it that we're gonna accept. They had a couple contingencies that we're navigating. But overall, it looks like we're gonna take it. But what is with these realtors recently? Because we also had them listed before as, like, fixer uppers. And we had someone who, like, made offers on them without making it clear what the buyer's goal was. Yeah. And it's like, why are you wasting everyone's time by, like, trying to hide what you're trying to do? So basically, what happened, these little tiny homes up on one of the lakes here, and we had several people that reach out with her that were basically wanting to do all these inspections and stuff that they wanted us to pay for so that they could figure out if they could knock down the cabin and build a larger house on there. Right. And you know what? If you just ask if that's possible, the answer is no because the lot isn't big enough, and the septic system isn't large enough to hold that.

Dan Austin: [6:20] Well, and it goes back there. We've had this happen to us a few times on listings, which Yeah. This is just bad form of asking the owner to pay for an inspection.

Mike DeHaan: [6:29] Right. Yeah.

Dan Austin: [6:29] That's weird. Like, sure. I'm gonna call my buddy, he's gonna come and inspect it, and it's gonna cost me nothing. And he's gonna say it's really good to go. Like, that's, like, what could happen. Right? You would never want to do that. If there's some some contingencies in there, hey, if there's new repairs that need to be doing, right, that's normal. Right? You pay for you're the buyer, for the inspections, because I think the house is great. Inspection complete. I'm the seller. Yes. Why would I pay for your due diligence? Like, that's on you. And and so you see that in a and then also you see it a lot of times with some of these folks making offers. It's like, they're so used to the frenzy, they got to get their offer in. And then all of a sudden, you're right, then all these questions come out. It's like, why didn't you just call and ask beforehand? Like, that's communication in this game is how we play because we're willing to work with you. Yeah. And figure things out with you.

Mike DeHaan: [7:14] Yeah. Well, it's funny because you're seeing that in the retail side. And I feel like that is the kind of thing that realtors sort of look down on wholesalers upon is they like, you know, they will get contracts that they're not prepared to close on. It's like, you're doing the exact same thing where you're basically getting a contract at all costs and then trying to figure it out. That's what, like, worst wholesalers do, is they'll go and they'll lock up a property for way too high and try to, like, beat down after negotiations after they're verifying all this, whatever. Mhmm.

Dan Austin: [7:41] And it's like the realtors are not

Mike DeHaan: [7:43] doing the exact same thing. All of a sudden, we're switching places.

Dan Austin: [7:46] Well, and in their defense, if you're just a real if you're just a retail realtor with a little bit of experience, like, I also on listings, I'll get like, whenever we're trying to, you know, wholesale something or whatever, I'll get offers from people that are wholesalers and quotations. They're just and you look at the offer and you're like, come on, dude. This is the most janky thing. Know exactly what you're trying to do here. Like, they don't call you. They won't do anything. They'll just send you an offer and ask you to sign. It's like, well, I guess that's a way to do it. But that's, like, the most awful way to do it. Like, pick up the phone and call, talk to the person, here's what I wanna do. You think your sellers are open to it? Nah. Okay. Cool. I'm good. Walk away. Yeah. I mean, which is

Mike DeHaan: [8:20] right there. You gotta talk to people. That's how you get everything done in this business. It's all relationship business. You know, just like we said No.

Dan Austin: [8:25] I can't do that.

Mike DeHaan: [8:26] Yeah. Well, I mean, you know, you have relationships. Just like we said in the last episode, talked about GoBundance a lot. You know, your network is your net worth. And that's locally. That's in everything that you do. Yeah.

Dan Austin: [8:36] But absolutely. But, yeah, I mean, you're going back to how the conversation opened. I think we got a lot of things moving now. We're kind of sitting there because there's definitely like a a shortage of contractors and lay and and labor. And and for us, personally, there wasn't a sort of shortage of deals. I mean, how many do we have in escrow right now?

Mike DeHaan: [8:52] I lost track. I I posted on my Instagram the other day that we have, like, 19. I think we're, like, 23 or 24 now.

Dan Austin: [8:57] So, yeah, we got a ton of deal flow. And then for us, when we're taking these down, was kinda tough just to we had the one with the tenant in it, the tenant own owner that became a tenant in it that we finally cleared out. That one was awesome.

Mike DeHaan: [9:10] It was just just as, like, the most classic situation. You guys go check out my, my Instagram at mike underscore invest. I did, a live video where we just go through and walk through it. And these people, I mean, they were just a a headache. You know? So they stopped paying us rent a couple months ago. I think they were kinda bitter about the fact that, you know, we bought this house and and I don't know. But, they told us that the place was, like, cleaned out. Well, I guess, first off, we uncovered that they had some sort of situation where the lady told us that, like, 20 something people had lived there over the last ten years. So they were, like, trafficking people or something terrible. Something not legal. Something not legal for sure. Like, they're definitely something super hairy. And then after they moved out, our guy, Judd, is over there, you know, just kinda doing a walk through and sends us a photo of, like, ammunition and, like, these, like, gun parts and stuff that were all kinda stashed out in the shed. And we were like, okay.

Dan Austin: [10:06] Is just so random with all the other random trash that was there.

Mike DeHaan: [10:08] Yeah. Right. So we would go over there. She tell she tells me the place, like, all cleaned out, ready to go. We're all about this house. You know, from the outside, looks okay. But then we start going into it and just so much trash. Like, as as you put it, it almost seemed like they they brought trash into the house before they moved out. You know, and just like little things like, you know, that I I texted her afterwards and I was like, hey, did you really have to leave all of your meat in the freezer? Like, could have gone away. She goes, oh, that that freezer hasn't worked for months. I'm like, and you just left it there for months while you lived in the property?

Dan Austin: [10:42] Just disgusting people. Like like,

Mike DeHaan: [10:44] what is wrong? Because there so I opened the freezer and it just stunk and there's, like, all this meat juice oozing out and then you found a jar of weed that they left there. I mean, it didn't have their property.

Dan Austin: [10:53] Always leave their weed, man, which is surprising. I that's not the first house. Yeah. I remember remember twentieth, we were there. Oh, yeah. Yeah. Weed and some weed candy, which is, you know, fine. I don't care. But like

Mike DeHaan: [11:01] We'll leave even then, though those are, like, kinda like those are edibles that were sort of, like, stuffed up in a shelf. That's one thing. This was, like, an actual jar of kush that they were obviously smoking. Yeah. Just left their

Dan Austin: [11:13] own probably.

Mike DeHaan: [11:14] Yeah. Right? Well, we know that they own, a weed farm up north somewhere. But yeah. You know, like, just such random stuff everywhere. And I'm just like, I don't understand how people, like and I'll same thing. Just just say, like, hey. We're not gonna clean it out. That's fine. We'll get the junk people over there, but don't lie to me about it.

Dan Austin: [11:36] Yeah. Well, this this one was lying. She was lying the whole time. Yeah. But either way, like, we finally got them out. That was a tenant issue. Like, we dealt with it, and we're still got margins on. We're still gonna make money, so that's cool. Yep. Hopefully, get that thing, sent out, or listed or whatever we end up doing on that one and got our two week flip, hopefully wrapping up tomorrow, which is cool. That'll get listed next week and then, onto our other little tiny cabin, we'll fix that one up.

Mike DeHaan: [12:03] Mhmm.

Dan Austin: [12:03] And then maybe, just maybe, we'll start working on our Airbnb with the oil leak that everybody that's a listener, has heard about, which is still up in the air five, almost six months later. Just really hate the insurance company. And all the adjusters where we've got we've had three adjusters because apparently we're hard to deal with, or it's a unique situation, whatever. So hopefully clearing all those off. Think that's kind of a goal of yours and mine is too is to kind of clear off our list of projects just as we go forward and and reduce reduce our exposure there.

Mike DeHaan: [12:34] Yeah. With that one, even though it is sucking that sitting empty,

Dan Austin: [12:38] at least we got out

Mike DeHaan: [12:39] of that hard money before that whole thing went over. And we were close on that. So I was act I was looking at some emails recently. We refinanced that thing, like, two weeks before that whole situation happened.

Dan Austin: [12:49] Yeah. Absolutely. We finished. We refinanced because we were on top of our shit. We were, like, finishing rehab. Let's get the refinance done. We got it put up on Airbnb. And then, like, within weeks within weeks, probably a month of it being, like, to go, we could just

Mike DeHaan: [13:03] It it was it was, like, thirteen days. Yeah. Was two weeks. It was right afterwards. So, you know, at least we're paying it down on a thirty year note right now. That's cheaper than, you know, 9% hard money loan or whatever we had. Yeah. So but yeah. I mean, maybe we can get to that one. That'd be good. Start getting some cash flow there. And then our condo flip, the one that got blocked by the HOA insurance, finally had a meeting with the lawyer. And ultimately, what's gonna have to have to happen is we're completely just dismantling the HOA over there. I mean, as much of a nightmare situation is, the HOA and the manager of it has been awesome. Yep. Like, they're super, super nice, and they recognize that it's a terrible situation that, you know, not only are we in, but also to that everyone there is kind of, like, trapped with their houses. They're not gonna be able to sell it or refinance or do anything until this is solved. Yep. So they're all highly motivated. And then we went we went to our little HOA meeting over there. Everyone was like, wait. So we don't have to pay these stupid HOA fees anymore? Like, yeah. Let's get rid of it.

Dan Austin: [14:03] Yeah. Let's junk this thing out.

Mike DeHaan: [14:04] Yeah.

Dan Austin: [14:05] It's a weird story, which I guess I don't know how we would have known that going into it, but it's a learning opportunity as you're kind of learning to review some of these documents because there is a history with the HOA of why it was set up the way it was. Mhmm. And, you know, now we know. Well, the thing

Mike DeHaan: [14:20] that sucks with it is even if we had reviewed all this when we bought it, it wouldn't have been an issue. So, like, the issue has occurred because of the rapid inflation in, material costs in real estate. Right? So that's the whole thing is that the current insurance that they're able to get will not cover the value of the property because the value of the property is so much higher than the replacement cost.

Dan Austin: [14:44] The

Mike DeHaan: [14:44] replacement, yeah. Yeah. So they had issues in the past where they had to make an insurance adjustment, and now they can only get insurance that'll cover the replacement cost, not the actual value of the real estate, which, a, doesn't make any fucking sense.

Dan Austin: [14:57] Well, it's I guess to restate that, it will re it will it's a fixed cost. Yeah. It doesn't cover actual the actual cost. Yeah. It's it's a fixed cost, which likely would still be enough to rebuild it if it burnt down, but it's not enough to give a lender confidence that in case inflation goes up even higher, that those build costs wouldn't go exceed that. Correct.

Mike DeHaan: [15:19] Yeah. And because people are looking to buy it, you know, traditional buyers, and so they have to be able the lender has to able to sell it to Fannie Mae, Fannie Mae has all these guidelines and just the whole freaking situation. So that's why we were able to buy it and get insurance is because we're with a hard money lender who holds it in house and doesn't have Fannie Mae restrictions. So the insurance company doesn't care. It's the lender. Yep. Right? So but anyway, if if real estate hadn't been growing so quickly, we wouldn't have had this problem because the value and the replacement cost wouldn't have sorry. The value wouldn't have exceeded the replacement cost so drastically, which throws off the what the insurance is willing to cover. So, anyway, it's at least making progress. I don't I I should be hearing back actually in the next day or so what the timeline is hopefully gonna look like for that. But, I mean, we're gonna find out here pretty quick if we're completely screwed or just mostly screwed. Yeah. Yeah.

Dan Austin: [16:13] I mean, the worst case scenario on this so our for context to the worst case scenario for us on this is we just rent it out. We'll, you know, hopefully, through the year, we'll have to figure something out on that financing piece for us because we do have a hard money loan that has a balloon at twelve months. But we could potentially rent it out, but then we can wait it out for a short period of time until the insurance on this can be changed. The insurance policy for the HOA can be changed.

Mike DeHaan: [16:39] Yeah. Yeah. Well, I almost wonder as well, and now we can just talk about this a little later. But, I mean, if we did have to keep it, if it would make sense to refinance it with a long like, it's it's gonna be, like, a couple year process. We're just not we're just gonna be completely s o l. If we'd be able to refinance it with a long term lender that doesn't sell to Fannie Mae, like a commercial lender or

Dan Austin: [17:00] a private lender. Yeah. I think that would probably be our our solution. It's gonna it'll it'll cost money and fees and all that, but we have margin on this, which is, you know, we want that's how we do our deals. We go in with margin in case something goes sideways. And yeah. We could do it.

Mike DeHaan: [17:12] Yeah. We have we have fat margin. Maybe we have, like, $85,000 profit on that thing, which is what really sucks, honestly.

Dan Austin: [17:18] Yeah. Every month, it dwindles down a little bit more. Little bit more. Yeah.

Mike DeHaan: [17:21] Yeah. We start holding costs.

Dan Austin: [17:22] You know, you know, I say this all the time. Don't don't count the chickens before the eggs have hatched kind of thing. Don't count your money until it's in the bank account. Because if if had we been relying on that money, which we kinda were

Mike DeHaan: [17:32] Yeah.

Dan Austin: [17:32] We're kinda hoping it would come back to redistribute it into other projects, but, you know, we had to pull other levers.

Mike DeHaan: [17:37] Yeah. Yeah. I mean, know, exactly. Right? And that was literally as close as it could get. I mean, I think that thing fell out the day before it was supposed to close. I had to I had to cancel my Tesla preorder, bro. Exactly. Already already got to

Dan Austin: [17:51] play it.

Mike DeHaan: [17:52] Yeah. Oh, darn. I wish. Someday someday I'll I'll be comfortable enough to throw away money on frivolous things.

Dan Austin: [17:59] Well, you know, speaking of which, I did do some research on buying, like, Lamborghinis. So there's actually a sweet spot if you wanna buy a Lambo Mhmm. Where they don't depreciate anymore. And it's it's like a a certain year range. I wanna say early the early aughts. Yeah. Right now and today, you you can buy some some models of Lamborghinis that, you know, cost you around 90 to $100,115. You gotta get a low lower mileage, usually under 20,000 miles on it. Well taken care of, you know, parked in a garage type situation. But then it won't depreciate below that dollar amount, hypothetically. And so really, to drive a Lamborghini, you're paying yourself every month because you can typically do eighty four month financing on these things, which is around $1,500 Yeah. Close to a Tesla. And so then you're again, to drive a Lamborghini, you're basically paying yourself to own it Because then when you sell it, you're gonna sell it for what you bought it for because it is an appreciating asset at that point.

Mike DeHaan: [19:01] Well, you should just talk to Ryan Dossi about that. That I mean, his Ferrari, he bought it for, like, I think it was, like, $2.30 or something. And now that same one, if you were to sell it, it's worth, like, $2.60, $2.70. You know, it's going up in value because he did he bought that sweet spot price range in in car. Right? So, you know, or or like I said, the long term financing when we were in Miami. I was in Miami last was it a couple weeks ago now? Me and Billy, our buddy Billy from one of our other groups, we're out walking around and there's a Ferrari dealership there. Right on the Ferraris, they have a sign. It's like it was like a 144 month financing. There you go. And it was like like, your payment on this car will only be, like, $1,140. I was like, I mean, you make sound bad. You do it that way, and I makes it very affordable for people all of a sudden.

Dan Austin: [19:51] I mean Yeah. It's not that bad. And you can have a one rental property that cash flows that much.

Mike DeHaan: [19:55] Right? I mean, if you wanted that Ferrari for twelve years Mhmm. I mean, you can do that. Like, that that payment I mean, if if you were to go and buy a a Ford f one fifty right now, your your payment would be $900. Might You as well spend an extra $200 and get yourself a Lambo.

Dan Austin: [20:11] Get that Lambo, dude.

Mike DeHaan: [20:13] Hilarious. Anyway, so going into the educational portion this week, one of the things we wanna talk about that has come up a lot in our group and other groups we're in and also actually talking to one of my competitors is cold calling for marketing Mhmm. For finding properties. Is it still effective? And how exactly to go about it if you're going to do it? So anyway, after a little ad here on the instant investor program, talk about that.

Dan Austin: [20:40] So Cool.

Mike DeHaan: [20:41] Be right back. The instant investor program is our twelve week group coaching program, which includes a self driven course and access to our private investor community. We will take you through the full process of how we find our leads, how we market, how we do our sales and follow-up, and how we determine the best strategy for every opportunity that comes our On top of that, you will also join a community of other like minded investors nationwide that are all marching towards the same goals, and you'll have direct access to Dan and myself so you can continue learning and growing with us as we continue to adapt and grow our business. So whether you're a new investor or already established, our systems can help take you to the next level. So if you think you might be a good fit, go to the instantinvestorprogram.com and schedule a call, and we can have you talking to motivated leads in as little as two weeks. Alright. Cold calling. It is a common tactic right now for people to look for deals. There's a lot of questions about the legalities of it. TCPA has guidelines around, you know, calling people on do not call lists. It is very popular with people because it seems like it's cheap because it's an upfront cost, but it's also mean that it is very heavy in labor. Mhmm. And one of the biggest challenges with it right now is that, you know, with the legalities of it, there's been a huge number of people that have been added to do not call list that you can't legally call now. And there's also been an incredible influx of companies who offer cold calling, who frankly suck, and they market traffic to people who don't know what the hell they're doing, but they're like, oh, that's a thousand dollars a month, and you'll generate leads for me. Even though those leads that come in are trash, you know, and they're not motivated, and they're not actually wanting to sell.

Mike DeHaan: [22:22] And, like, the whole business model of these companies is like, well, you see leads coming in. So as far as you're concerned, being an ignorant new investor, it's it's effective, which is absolutely And I

Dan Austin: [22:33] have a I have a real issue with companies that sell leads in general, whether they're cold call leads, text leads, leads, whatever they're saying they're sending you. I have a real issue with that because you're right. The lead quality is generally really poor because they have no stake in the game once they give you the lead. They have they have nothing. Mhmm.

Mike DeHaan: [22:50] They they already have your money. You know, they they have yeah. Exactly. No stake for it to be a good lead. Like, they have no upside at all. So all like, their whole business I would actually be interested to talk to somebody who runs some of these businesses what their anticipated churn is. Because if they're sophisticated, they're gonna know what the average lifetime of a client is. And I bet you there's a ton of them that they realistically only expect to have a client for three to four months before they leave because they know their product sucks. Yep. Right? Yep.

Dan Austin: [23:18] And they just have to build their business around a lifetime value of x dollars for three months. Yeah. And then know that they're gonna churn. And as long as they can pile a good portion of their income into marketing, they'll always have a reoccurring client base. Yep. So they can have capacity for a thousand clients, and they're always gonna have a thousand and they lose 300 every month. Mhmm. Add 300 every month.

Mike DeHaan: [23:39] Yep. Exactly. And, you know, and they they get inundated into some of these communities, and they go and they find, like, the one guy who's new, who's like, this is so awesome. I'm getting 15 leads a week. Like, I'm not having to do anything. This is great. He doesn't know the leads suck yet. So but he goes and he tells all of his friends in the community. They all go piling onto it. They all sign up. Then over the next four months, the whole community is like, wow. That group sucks. We didn't get anything from that. But it doesn't really matter because you've already got their money for

Dan Austin: [24:04] four What kind of exclusivity agreements do they even have? Like, hey. You know, how many how many guys are buying the exact same leads in our home market from these companies? Right? It's like,

Mike DeHaan: [24:14] be careful there. Yeah. Well, and that that's where it gets shady too before oh, I will bash on it a little bit more here because, obviously, I'm not a huge fan, but I do think it does have value. But that's where it does get shady is we we worked with a company for a while. It's actually run by a buddy of ours, and I'm not gonna mention if he listens to this, you can go ahead and shoot me a DM and, yeah, I'm about to blast your company. But, basically, what would happen is I would hit him up and I'd say, hey, man. Like, we're not really getting a whole lot of leads. Like, I think we wanna, you know, shift directions here. I don't wanna keep using you. And he'll be like, oh, let me let me see what's going on. And then all of a sudden, the next day, we would get, like, nine leads. Right. And I'm like, what the hell was happening for the previous several weeks that you can just turn it on like that? Like, are you withholding stuff? And you'll be like, oh, I just put on another collar. I'm like, well, why don't we always have that collar? Yep. Like, it doesn't it doesn't it doesn't it's not like it went from one to three. It went from, like, one to nine. And that happened Yeah. Over and over and over again.

Dan Austin: [25:09] And you don't have any view into their back end process to see that to see they're just like, let me just dump them into your CRM or give you a form to have dump into your CRM. And so it's like, what's going on? How did I just get nine more after I called you? Like, that's weird.

Mike DeHaan: [25:22] Yeah.

Dan Austin: [25:23] Where do these leads even come from? Did you just pull them off the list and just tell me their leads?

Mike DeHaan: [25:27] See, and and that's the thing too. And and that's where we get suspect as we've had this with other ones is, well, well, you know, we we still use a cold calling service for now. It should probably end up this next week. But they gave us two free weeks after I tried to cancel. I was like, I might

Dan Austin: [25:39] as well Might as well get your free free leads. You never know.

Mike DeHaan: [25:43] Yeah. But, like so what happens all the time and our sales guy reports this is, he's like, yeah. So I called that number back. That is not the people who own the property and it's not associated with the property at all. So I'm like, so are they literally just, like, submitting things that are crap? Right. But point the point being I I think the bigger picture with that is to be extremely skeptical of anyone that's providing you leads that you don't have a deep knowledge at their back end. But if you are going to cold call, I do think that there is some value to it. But, you know, I think it should generally be more targeted, or you should have someone do it that's in house so you can monitor their progress and have it be a high skilled individual. I think the big mistake well, I guess, the first big mistake when it comes to cold calling that people do is they they go for, like, cheapo data. Like, they'll go and find, like, you know, whatever cheapskiptracing.com. So skip tracing is basically when you take your list that you pulled off of, you know, PropStreamer or wherever you get it from. And you go and plug it into these systems, and it gives you a bunch of phone numbers comparing the addresses with the names on that sort of stuff. And there's so many companies out there that are doing this right now. Again, if you're looking for suckers, and they'll go and they'll say, like, I'll do $2.02 cents skip tracing, right, which is super cheap.

Mike DeHaan: [26:56] And you go and you plug in your your spreadsheet to that, and they spend out spend out a bunch of numbers. And they're like, far as you know, all those numbers are good. But really what they did is they just put in a bunch of BS numbers that aren't actually anything.

Dan Austin: [27:08] Right. Right.

Mike DeHaan: [27:09] And they'll be like, oh, our hit rate's only seventy percent. Sorry that thirty percent of them are bad. It's like, well, you just paid them a shit ton of money for fake data. Yep. So you have to find reputable people. We use one that's called Skip Genie. That's been great. Like, we we've tested theirs with a bunch of different calling and texting services and have a really good hit rate hit rates with that. And then the second issue that people have besides going into either outsourcing the things they don't have control of, or what they'll do, the alternatively, is they'll they'll hire someone that is super low quality because they're really cheap, and they're overseas, and they typically have an accent that is not conducive to the area.

Dan Austin: [27:50] I get those calls a lot. Hello, mister Austin. I would like to you're like, alright. Okay. I know this is Yeah. It's a cold call. Let's let's go.

Mike DeHaan: [27:57] And understand that that's, you know, $4 an hour. You can find someone from Pakistan that barely speaks English that will go through your whole script or whatever. But they're not generating good leads for you. So the most productive cold calling we've had was when we had our Central American lead manager do cold calling in his off time. He used a triple line dialer, which basically means just dialing three lines at once through through Mojo. Mojo dialer is the service that we use. So just like any call center would use, but he spoke perfect English. He was a sales professional. He knew the script. And he would go into things basically with an intent to build rapport and not just to, you know, basically ping them and and submit them to the system. Right? And that was much more expensive, you know, $15 an hour. He didn't do it full time. He did it kind of in his off time when he didn't have leads he was following up with. And we got some killer deals off that.

Dan Austin: [28:48] Yeah. We did. He did a great job. And I think the other key to that to speak of that on him too, one of the reasons he was successful is because his job was to follow-up with leads as well, whether they were cold call leads or male leads. And so he had a direct incentive Yeah. To make it a good lead and to do a good job because he was gonna be

Mike DeHaan: [29:03] the one dealing with them immediately afterwards. Correct. Yeah. That's that's really good point, actually. So he already has that relationship. And it's not like, you know, he's calling and saying, oh, you know, I'll I'll have, you know, my boss call you back something. He was actually going through setting up the appointment, doing the entire process, getting all the information, establishing that relationship. And then, you know, further down the line, he would reach out to them again, they already knew who he was. Yep. You know? And so if you're gonna do cold calling, that's realistically how you have to do it. Mhmm. You know, I I know some companies that are very successful with their cold calling will actually go as far as having, you know, their acquisitions people who are, you know, true American people on on commission, do their cold calling in their off time, or they're like, you know, people starting out will do it themselves. I know Thatch Thatch win in Seattle. He's like, this this dude is like the definition I of mean, he he's worth probably tens of millions of dollars at this point. He owns huge amounts of real estate, those huge incredible development deals. But he cold calls himself. Yeah.

Dan Austin: [30:03] I love it. I mean, and it keeps you sharp too.

Mike DeHaan: [30:05] Right? For sure. Right? It's all sales skills, but and that's the way to do it. But you know what? I guarantee you he's getting better results than with his resources. He could go in, buy an entire Eastern Asian country and make them all make them all cold callers. Yeah. Exactly. Wouldn't get as good results as he probably gets himself because he's educated, you know, language matches the area, like, knows what he's doing, and he's built high rapport on that first call.

Dan Austin: [30:29] So let me recap too. I wanna maybe do this process. So if you wanted to do cold calling Mhmm. So you're gonna start out. You're gonna go get your list of of people, of your of your potential leads. Go to PropStream or whatever whatever software you're using, pull that down. Mhmm. You're gonna skip trace those numbers. Yep. And you're probably gonna do a do not call and litigator scrub. Mhmm.

Mike DeHaan: [30:51] Yeah. That's very important. Yep. Thank you.

Dan Austin: [30:53] Okay. So that you don't get yourself into trouble. Yeah.

Mike DeHaan: [30:55] And most services will offer that for free. Like,

Dan Austin: [30:58] Skip Genie, for example, offers that. Yep. So you say you've got 30,000 people on your list that gets scrubbed down to maybe 15,000 or whatever. Mhmm. And then now you have skip traced, hopefully clean from litigators and the do not call list.

Mike DeHaan: [31:14] Mhmm.

Dan Austin: [31:15] And then from there, it's best is what you're saying is to have an in house or somebody in your company with excess capacity do the cold calling. To do that, you need to get likely a dialer. Three lines seems to be something that we found as a happy medium. You can go above that or below that with triple line dialer, like, what's an example of one?

Mike DeHaan: [31:35] Yeah. So so Mojo dialer is what we use. Okay. It's really easy to set up. There's a lot of different ones out there, call tools and these different ones. But Mojo is so simple. And Okay. And you can kinda use it from anywhere without having to get like a license. So a lot of companies will make you actually go and, like, get a license to dial through them, which is the whole process. Gotcha. But I highly recommend getting a dialer even if you go for, like, a single line dialer, which is a little bit cheaper than a three line dialer. Because if you're sitting there doing it yourself or you're having your staff manually dial in numbers, they're gonna they're gonna kill themselves, honestly. Right. That would be just so monotonous. So and then there are some people who advertise, like, 10 line dialers or things bigger. But really at that point, it's dialing 10 lines simultaneously. If three people answer on the same one, it'll just select one of the other two people or just like, what is what are is this ghost call that I just got? And she's wasting opportunities.

Dan Austin: [32:26] I get those a lot. That's what they're for.

Mike DeHaan: [32:28] Yeah. Yeah. Honestly, that's probably a 10 line dialer, yours wasn't the one that got picked. Yeah. So yep. So, yeah, get that get those get on a dialer. Yep. And then once you are once you have people on

Dan Austin: [32:40] the

Mike DeHaan: [32:40] phone, if, you know, I wanna be in house, you can track, you know, what kind of people are answering and which ones aren't and what your total answer rate is. And then what that conversation should realistically look like is they are approaching them as if they are the actual representative that the client's gonna be working with, the seller's gonna be working with, and not as like a handoff. So they're gonna go through, they're gonna introduce themselves, do a basic prescreen before you show your business names, you don't go and get bad reviews and things like that. You know, it's like build a level of trust. And once you have that, you know, you can say, yeah, you can check us out. You know, we are legit. We are looking to buy properties in this area. And I guarantee you that your conversions on these leads will be much higher. And honestly, the workload on yourself and your your, skilled salespeople will be a lot less. So you're not gonna be wasting time trying to chase down these trash leads from some call center that they're submitting just so that you you stick with them

Dan Austin: [33:34] for another couple of months. Yep. So kind of what I observed too from the, like, outside looking in, and I think this is along the lines of what you're saying is, really, the the best cold calling, and it takes a little bit of effort on your part because you're doing the work Mhmm. Is is try to do it in house. A, you can track what's going on. B, you can make adjustments. And c, I would say, you can really refine your script to be specific. I don't know that the cost is any any cheaper or more expensive than paying for a service because some of the services are quite expensive.

Mike DeHaan: [34:05] Mhmm.

Dan Austin: [34:06] But then you can actually, you know, run your AV testing on and see if it fits for your company because the leads, cold call leads tend to be, a lot tougher leads to close. So your sales skills have

Mike DeHaan: [34:17] to be better than a direct mail and direct mail. We love those leads. Exactly. Yeah. That's another really valid point. So our business is very heavily direct mail. I'd say at this point, probably 90% of our deals come from direct mail. You know, sending those little, you know, postcards letters, different sort of things that we do. That's really what we teach in our instant investor program is how to do the direct mail process in a way that gets a lot of traction in the converts. Because it's the same same thing with the direct mail. Right? We can get this on another episode. But if you're just sending out the cheap easy version of direct mail, it's just like going to the cheap easy call center or cheap easy split tracing. Your results are gonna

Dan Austin: [34:52] get what

Mike DeHaan: [34:52] you pay for. Yeah. Exactly. Yeah. So, yeah, you're you're you're completely right. So for the direct mail, our typical time from a contact to assign contracts is about, like, twenty four days. For cold call leads, it's usually about seventy days. So it's like, you know, was that almost almost three times as long to get yourself across the finish line. And that

Dan Austin: [35:12] should start. Continuously build a rapport because you're cold calling them. They're picking up the phone. They're not calling you. They're not reaching out to you. Yep. You're gonna have that extra time building rapport because they gotta trust you first. I mean, they're talking about selling their house to you and you're some random person that just called them. That seems weird. Right. And so, building that trust and rapport is is huge and that's why it takes so much longer, to get them to come around to that idea. Exactly.

Mike DeHaan: [35:35] Yeah. And you have to go through that that whole, you know, just establishment process so that they know you're legit. And, you know, honestly, make them because it's probably possible that they weren't even considering selling until you called them and they're like, yeah. Maybe I will. Maybe I will. So perfect. So anyway, cold calling, I mean, it's not our favorite. But if you do it strategically, it can be very powerful. But just like with everything else, if you just go to push the easy button, you might get results, but you're gonna be spending a lot more money getting those results, and it's not gonna be as in your control. Right. So anyway, if you have any questions about that, if you think that we're freaking wrong, go ahead and shoot me an Instagram message and tell me I suck. We're talking about this the other day. I want I'm I'm so upset. I don't have any haters yet. I feel like I need

Dan Austin: [36:15] a hater to feel like I You gotta have haters to say you've made it.

Mike DeHaan: [36:18] But yeah.

Dan Austin: [36:18] Please do. Because, like, Mike and I, we've tried a lot of ways of cold calling a lot of services. And if you have a way that you're like, I know this works Yeah. Let us know because we'll pay you for it.

Mike DeHaan: [36:30] Yeah. I'll I'll pay you for it. If you if you know it works, here's what I'll do. If you show me that it works, you can come and you can get us a sick deal. I will split that deal with you $50.50 no matter how big it is. It's a $100,000 deal, and you can come and bring us a cold call service that gets us a legit lead in an appropriate amount of time, not like just fishes for three months, but let's say in, like, two weeks. And, you know, Dan and I make a $100,000 off it, I will write you a $50,000 check personally.

Dan Austin: [36:54] Oh, put your money where your mouth is, Mike. Exactly. That's how confident you are.

Mike DeHaan: [37:00] Yeah. That's how confident I am, but it doesn't exist. So perfect. Alright, guys. Well, thanks for listening. If you wanna learn from Dan and I about how we structured our business, full disclosure, it is direct mail heavy. But we we have some good results coming in there. One of our guys actually just snagged a lake house off of a postcard. Super

Dan Austin: [37:19] sweet deal.

Mike DeHaan: [37:20] Dope. Yeah. So that's like a $657,000 lake house that he got for $4.50.

Dan Austin: [37:24] And he bought the dude's cars.

Mike DeHaan: [37:26] And he bought the guy's cars. True hustler. Yeah. It's awesome. So either way, go to instantinvestorprogram.com. You can schedule a call with one of us, and we'll see if you'd be a good fit. You can follow us on Instagram. I'm at Mike underscore invest. Dan is at investor man Dan. You can check out our podcast at collectingkeyspodcast.com. On there, you can get a five step guide on how to start generating off market leads, which is kind of a basic guide to get you started. Or if you go to collectingkeyspodcast.com/ calculator, you can get our deal calculator that we are using to calculate the renovations and profit potential of all of the properties that we analyze. And besides that, you guys should subscribe to the podcast. You should download it. Go back and download every episode. That's what really bumps up in the metrics. And I think I covered everything. On. Like, at all of our call to actions? I think I did.

Dan Austin: [38:16] I think so. Yeah. Now everyone's like, there's too many. I have no idea too many. We're gonna have to cut this. Yeah. We're have to

Mike DeHaan: [38:21] cut it down. We're gonna

Dan Austin: [38:22] have to get we're have to clean it up a little bit, Mike.

Mike DeHaan: [38:24] Either way, go subscribe, download, and follow our socials and go to instantyes..com.

Dan Austin: [38:31] So Yeah.

Mike DeHaan: [38:31] Put it on, Dan. Send us off.

Dan Austin: [38:33] Yeah. Let's see. Yeah. Nothing special today. But if you are, gonna jump into cold calling, call me. I love to talk to cold callers. I even got cussed out. Remember that last one? Cussed out out of here. We're walking on a property and I answered it. I got I mean, the guy I think he forgot he was on mute, and he just started cussing me out in the Filipino accent. So love it. Send him to me. Let's do it.

Mike DeHaan: [38:55] That was so funny. You asked a couple questions, and you were totally just pawns like and

Dan Austin: [38:58] he goes, fuck you, motherfucker. Oh, he was so mad. I loved it. Yeah. Send him my way. I'll I'll I'll give him some

Mike DeHaan: [39:05] Awesome. Well, thanks, guys. Talk to you next week.

Speaker 2: [39:07] Thanks for listening. Please leave us a review on iTunes or wherever you get your podcasts. And check us out at collectingkeyspodcast.com for tips and guides on starting your own real estate investment and wholesaling business.