How do you get new leads with so much competition and marketing costs going through the roof?
We are going to introduce you to a way to get a lead for $37 and a deal for $1300.
Our friend Vaughn Bethell has a system he has used for over 30 years and he has refined it to a point where he now makes 35 deals a year off this method.
You may have heard us talk about driving for dollars, especially if you are in the early days of flipping and need to find leads without spending much money. Vaughn has found a way to take this to the next level.
So how does he do it?
Vaughn hires a team of drivers to go out and find properties. His drivers add 600-800 properties a week to his database. In fact, his company hasn’t used a typical ‘list’ in nearly 30 years.
He uses a software called Deal Machine.
It’s an app that allows you to create a filter that defines what properties meet your company’s criteria. These properties are then highlighted in the app and the driver’s job is to go to those addresses and see if they fit the bill. The driver can plug in a zip code, apply the filter, and the app shows where the highest concentration of houses are that fit the filter. The driver then goes to the property, takes a picture and adds it to the database. Individual drivers can add up to 300 - 400 properties per week.
Who goes in and determines if the property is qualified after the driver adds it to the database?
Vaughn has his lead manager go into the software on Monday morning every week and do a quick scan. Pictures are disqualified if they can’t be sent out via postcard. Also if a house from a decent neighborhood with no sign of distress is present, it is disqualified.
Overall for an experienced eye it is an easy qualification process.
Once qualified, they export those properties from Deal Machine and skip trace them. They use Batch Leads to skip trace because they also use it for text messaging. Once they clear the leads and skip trace them they add them to a campaign which includes our text messages and cold calling.
Vaughn saves money on postcards because he only sends them out to ‘hot’ zip codes. Those postcards he sends out directly through Deal Machine with the current picture of the property. Many times the owner of the distressed property no longer lives at the address and it is more trouble for them to come back, hire a contractor and do all that work themselves, than to sell to us.
How do you find and incentivize good drivers?
You can find good drivers from people you know looking to pick up extra work. It is about how they take on the job, and there are ways you can incentivize your drivers to do really well even in the early days.
Vaughn pays a dollar per property with about a 10% rate of unqualified properties that drivers improve on with experience. A typical pay structure is to only pay drivers based on deals that close, but Vaughn knows that people want to see the fruits of their labor right away so he pays them for the lead. A new driver earns a dollar per house and after the first week Vaughn discusses with his driver what is working and what isn’t. If the driver is owning the job and has high numbers early on, he offers them an immediate bonus $1.25 - $1.50 per house. To pay people just off closed deals can take 3-5 months and you want your drivers to feel inspired to continually bring in leads while seeing immediate pay. He also offers a bonus incentive of 1-3% if a deal closes as long as they are actively driving at the time.
What is Possible:
This year Vaughn’s company made 38 deals and 35 of those came from Deal Machine and driving for dollars. The total cost per deal from start to finish including marketing, software, salaries, and cold calling adds up to $1300 per deal and $37 dollars per lead.
That is low cost marketing!
Now you know how to get started. If you are in the early days of flipping, this is a method you can use by doing the driving yourself. Once you are off the ground you can pay a team.
There is a huge benefit to getting images and solid data using this method and if you are following the money, well, Vaughn’s success speaks for itself!