Replace Your W2 with Real Estate in 6 Months

Dan Austin: [0:00] Hey there. Welcome back to another episode of the collecting keys real estate investing podcast, the podcast by off market operators for off market operators. This is a show where we'd like to just talk about how to run your off market real estate business, the ups and downs, all the crazy shit that we deal with in this business. And I feel like more, like now more than ever, the focus is like it's getting tighter and tighter like the the the group of people in real estate investing, but in general, like an off market investing, flippers and stuff that's getting tighter and tighter and becomes more and more important to talk about these things and get a competitive edge out there so we can keep, you know, growing and succeeding. We talked a little bit about that today recorded earlier with old Dilpil and Mike, but then also just in the scale community, which if you're not familiar with it, that's our community, where really it's just honestly a peer to peer community at this point where we all come together a couple times a week, some phone calls and talk about the different things we're doing in our business, it's pretty awesome. I enjoy the hell out of it. But anyways, in that community, just seeing all of the operators, like we've actually like, you know, really reduced the size of the community going into this year, the last four or five months, and the folks that are in there are really been working with us. They started from scratch, a lot of them over a year ago, and now they're just in the day to day of their business and they're starting to see really good success where many of them, six, seven, eight months ago, were just like, I don't know if I'm gonna make it. They stuck with it, and now they're coming into q two going, I think I have more money than I've ever had before, what do I do with it? How should I allocate this capital?

Dan Austin: [1:35] Because capital allocation is an important thing, and that's something Mike and I preach if you've listened to this show at all whenever we're talking about challenges we've had in our business, a lot of it comes down to capital allocation, which is not my goal of this podcast. You know, my goal of this podcast is to talk about a conversation I had recently with a good friend of mine that I actually met in a different mastermind. Really enjoyed talking to him and he he'd recently moved to Texas and is really thinking about standing up like a full on marketing operation to do off market real estate there, and I'm really, you know, I encourage him to do that because I know he'll be very very at it. He's already he's got a portfolio. He's in a great spot. He's got a portfolio that covers his basically the living expenses that he's accumulated off market himself, just hustling and grinding. And so he understands the game. He has his monthly nut covered. Right? And he's living below his means so that he can figure out what he wants to do and figure out how to take advantage of opportunity. And so I've been kind of like coaching a little bit and giving him my input on how do you run like a mass marketing machine. I think it really ties well into the current time that we're in in the market because it feels like it's hard if you go read the headlines in the news, the stock market's up, the stock market's down, we don't really know what what side of the fence we're on. Are we are we gonna make a bunch of money this year? We're not gonna make a bunch of money, like, generally speaking from the economy standpoint. And what I'm seeing is that it was tough coming out of winter for us and a lot of folks in the scale community, but as it it usually always is.

Dan Austin: [3:04] Right? It's always never the busiest. Coming off of Christmas in January, especially if in the northern climates, is never like really popping. But more so now just looking at it and looking at the other folks that are really truly operating, like a lot of the noise is gone, you know, like the gurus are disappearing, they're starting to actually, a lot of them are getting, class action lawsuits against them and they're closing up shop, or they're just struggling to do anything meaningful because their following is shrinking, and I think their egos are like shrinking with it or growing or whatever, I don't know what what's happening there. But anyways, it's getting to be tighter and tighter and the folks that are really sticking to it and consistently getting out for it, they're starting to see the fruits of their labor just like they would a year ago, two years ago, but it just seems to be a little bit more clear of a path. I'm fortunate to get to see all the people in our scale community not just do well, but like, hey, I'm seeing myself do well and I'm getting to see the reflection of that, not that they're just copying what we're doing, but seeing the reflection of my feelings and like, yes, it's affirmation. Like other people are doing the same thing and they're doing well, and if you're doing it well, you're doing it consistently, you're gonna make money. And so that's what I'm talking to my buddy here moving to Texas, like, feel very convicted in how seeing his skill level and seeing that the machine and the marketing process, the sales process, the SOPs, the business model, it's very simple. It's not complex at all. But getting to see this over and over again work for people, it's been something that I I just strongly believe anybody can really pick up if you're committed to it, and certainly with my friend.

Dan Austin: [4:32] And a couple of the questions, you know, we talk about, one of them is like the marketing, like, can I just spend money on marketing? And generally speaking, yes, but how should you do this? And this is kinda one of my beliefs, if you're listening to this show and you've got a job or a company that covers your nut, maybe you work a w two job and you're just trying to figure out how can I get into real estate, how can I use this to to maybe grow my wealth or to pivot away from my w two? Keep that job or or keep if you have a portfolio that covers your nut like my buddy, great. Just keep doing that and let that cover your nut because there's nothing better than not having to worry about your bills while you're trying to build something good, so do that. You can go all in too, it's not a big deal. Like you guys have heard Mike's story, that's how he did it. But if you can just commit ninety days of spend, ideally a hundred and eighty days or six months of spend, commit that ninety days of spend. And I always like to say, do direct mail, and if you have the time in your schedule, calling yourself before you outsource it. Direct mail, allocate 3,500 to $5 to the direct mail if you can. If you can't, then you can just stick with cold calling. You're going to get one to two leads per hour cold calling every single day if you can do that. So like, I I was telling my buddy, you can do both of those because he has time, like, do that. Because you're gonna get consistently solid leads coming in, but you're not gonna get enough leads to have enough at bats to scale your business quickly. So pick up the phone and do cold calling, and also it's gonna make you better at being able to outsource that cold calling and know what good cold calling looks like.

Dan Austin: [5:58] You know, we've we've started a junior acquisitions program in our company here in Spokane, where we have three high school graduate, just like recently high school graduated kids cold calling for us, and we're teaching them, coaching on real estate, helping them understand maybe what the next pivot in their life may be because they are real estate curious, but they're kicking ass for us and and generating leads in American based cold callers with desire and motivation are always gonna do better than just outsourcing it to somewhere offshore. So my point being is that's an option for you to build that skill set as well and it's no cost to you, it's just time and hustle, so building that. But another question he had, he's like, well, there's so many options for marketing, like what do you guys do? And this is the guy, honestly one of the main points of this podcast I wanna talk about. This isn't necessarily a newbie podcast of how to start up a business, it's really how to adjust and adapt your marketing as you go and to be consistent. We never say no to anything. Mike and I, I'll I'll I'll use cold calling as an example. Mike and I have done cold calling in every which way. We've had Filipinos, Egyptians, Pakistanis, we've had Indians, we've had people all over the all over the globe doing it for us. We've insourced it.

Dan Austin: [6:59] We even built a cold calling company and sold it this last year. So it's like we know cold calling. It's it's like one of our things where it's not my favorite, direct mail's always been my favorite, but we know cold calling really well. We like I said, we've done it from every angle upside and down, and we never say no to it, we come back to it. And one of the reasons why is because I don't know what it is, if it's moon cycles or what, but cold calling, sometimes it's really, really good in some markets, in other markets it's terrible. But then fast forward six months and you start hearing about some dude who's closed five deals off of cold calling, you're like, what's the difference? Like, I don't know. This this is how cold calling works. And it's not how cold calling works. Cold calling goes ups and downs just like any marketing strategy, but for some reason, I don't know I don't know, like I said, maybe some moon cycles, it can do really well for you. And also in your business, you gotta look at what do you need. Do you need to get some at bats? Maybe you do need some cold call leads where they're not gonna be as expensive as a direct mail lead. If you're spending $250 basically per lead on a direct mail, like a good solid direct mail lead or a $100 or whatever it is in your market, kinda want that to go well. You don't wanna just burn that money.

Dan Austin: [8:03] And so cold calling might be a good way to get extra leads in there, get some at baths, and you're gonna grind, you're gonna work a little harder. Bringing in an American based cold caller is gonna be a little more expensive and you're gonna be a little less grindy, you're gonna get less leads, but they're gonna be better leads. And so there's all these options, and that that's where we're at in our business is like, we don't really need to outsource cold calling. We wanna insource it because we want those more high quality leads for our acquisitions team. But also, we're looking at the progression of our company and like, hey, one of these folks might step into more of a senior acquisitions role, and we we want to train them and coach them from the bottom and bring them in the company. So that's where we're at in our business. It's different for for everybody. But we never say no to a marketing source. Q three last year, we started PPL. That was actually the first time Mike and I personally have done PPL. We had really good success. Going into q four, early q one this year, it was terrible. Like, we were wasting money on it, so we stopped. But then we had we you know, going into q two this year, we had a little bit of credits on there, and we're like, lead flow is a little bit slower on the male side, so we're like, let's turn it on and just see it. It's like, let's test the waters, dip your toe in it.

Dan Austin: [9:04] And if you can see early success, pop off with it, take it, do what you can with it, and then don't be afraid to to stop it if it's not serving you well, but then come back to it, right? Like don't say no to anything. That that's one thing I want to convey here is like, cold calling might suck right now, but doesn't mean I'm not willing to go back to it. And if my business looks different six months from now or a year from now or three years from now, I may need to change. Like, I don't really believe anybody when they say, oh, I've built my business and I've only always done cold calling for the last ten years. It's just like, that's all you've done? I don't believe so and like, because that's just not how it works. The only thing that I would say works consistently always is direct mail. But even then, you're not gonna it's not a linear growth model. If you just spend more on direct mail, you make more money and you just keep growing your business, that's not how it works. So if you told me that, I would just not believe you. You need to have some diversity in your lead generation because sometimes direct mail doesn't hit or the post office delays your postage for a month. And if you don't have another lead source, which is actually why we got into PPLs because we're like, we need to layer in another quick lead source. Let's turn the faucet on immediately. And PPL is good for that because as a lead gets generated, you just buy it from them.

Dan Austin: [10:14] Right? And you can use multiple lead sources, multiple PPL sources, and get quick leads. And so something with cold calling, can spin that up pretty fast. Texting, obviously, that's another marketing strategy that we did when we sold our cold calling company, but with the laws and regulations, we just kind of stepped away from it for now from doing it. So and that goes with other other there's tons of other lead sources. Right? But my main point is, you gotta be dedicated to a marketing strategy, and don't ever say no forever to anything in this damn business because there's so many times like you turn on a new lead source and you get a deal, you make $30 on that deal and that pays for six to eight months of that lead source. Like, okay, you can't say that that's a bad that's a bad investment. But the other thing, as I was coaching with my friend that I that I talked about is like, don't get wrapped up, Mike and I preach this, so this is not new to any of our listeners, but don't get wrapped up in those early flips. Just wholesale, man. Try to get to three to five wholesale deals a month consistently, giving yourself giving yourself ninety days of of investment into you, into your business with the paid marketing, and your time. And then at the end of the ninety days, I'm not saying you'll close a deal, but what you'll have is you'll have a pipeline of people to follow-up with, and there will be a deal in there, and you probably will have at least offers made or deals under contract that are going in escrow to close. And then once that faucet breaks, then you get that recurring income, and you keep going from there, and then you can keep growing, and you can get to that three to five deals. Three to five consistent wholesale deals a month is going to generate you likely a 6 figure income, if not a multi 6 figure income, just depending on your wholesale average deal size right now, which we were up at around 21,000, 22,000, and then going into q two this year, we've we've dropped down just twenty twenty five. We're we're locally about 16,500, which is fine.

Dan Austin: [11:59] That's kinda where we balance up between sixteen, seventeen, and 22, just depending on the on the deals we have for that year. But if you think about that, if you can do three deals even at $15 a month, that's $45,000 in revenue a month, and you're gonna have pretty high margins with that as a solo operator or a small operation. So you just gotta get to that point. Don't get shiny object syndrome and don't don't stretch yourself to go buy a buy and hold because that's what you got in this business to to do. Don't stretch yourself to go and do a flip. Just focus on getting really, really good at underwriting deals that you can wholesale and make a profit on. And from there, by the end of twenty twenty five was what I told my friend, you're gonna have a freaking operation that generates a ton of income. You got your nut covered by your by your your portfolio that you've built with all that hard work. Now you have this fun money, this play money, and this goes for those of you just starting out with that w two job. For those of you that are diving into it, once you get to that three to five consistent deals a month, you're gonna be like some of the other folks in the scale community where they're like, hey, I've got more money than I need.

Dan Austin: [12:57] What do I do with it? I'm kind of like at this conundrum of like, do I reinvest into my business? Do I do I have fun with it? Do I invest it somewhere else because I don't wanna I don't wanna go buy a rental property right now? And all of the above are options, but you gotta really work your butt off to get to that point, and it's really not that long of a timeline. If you look at it right now, starting q two twenty twenty five, I strongly believe if you follow these systems, you will be able to have a full time operation in six months. It's not gonna be easy. It's gonna take some work, but you wanna do it. So if you're sitting there on the fence thinking about, gosh, does this really work? I'm telling you right now, it does work and it works in all markets, and you just have to be willing to put the effort in and see it as an investment into yourself and and doing what you need to do to get there. So anyways, I've blabbed on about this. It really started with a with just a random thought when I was talking to my buddy of wanting to spin up his off market business in Texas. And I hope that I was able to convey to you that that the the consistency of the marketing is key, but also being open to the to to the different marketing strategies and multiple points in your business is what's helped Mike and I. So hopefully, that's something that you can try out if you're if you're running an existing business and you said no to another lead source, but you're feeling like you're just not getting the leads that you really need to get to keep your business growing, look at those other lead sources, be willing to try them again, try them in a different light, try them in a different method, try them in a different way. Listen to more podcasts where we're gonna talk about these things, maybe even join the scale community, this is all we do, is talk about this stuff a couple times a week in our scale community calls.

Dan Austin: [14:25] So hopefully you enjoyed this. Hit me up on Instagram if you have questions, thoughts, concerns, anything about what I said here at investor man Dan, and have a great weekend, and we'll catch you all next week. See you.