Who is Darren Dicke Darren Dicke has been a full-time investor for the last 7 years. In that time he bought from the sheriff sale, purchased sub-to, bought and sold lease option & land contract, completed short sales, done renovations. Pretty much every way someone can invest, Darren has. However, wholesaling is what Darren is known for and the niche he has completed the most deals in (over 150). Darren is one of the top wholesalers in the nation. Valued for his money-making, no-nonsense, personal approach to the business, Darren shares his experience and acumen as both a top-rated industry speaker and sought-after personal coach. Get to know him. REISecrets.com
Hey, this is Stacy Kellams with www.reisecrets.com, and this is your monthly What s Working Now interview series. We ve got a great, great interview lined up for you this week. This week I m going to be talking to my good friend Darren Dicke about wholesaling. If you ve listened to me at all or been around me or on this What s Working Now series for any length of time whatsoever, you know that I am firm believer in learning to wholesale property before you learn to do anything else, because you can make so much money so quickly. You ve got to learn to print cash on demand, as I call it, and that s exactly what Darren is doing; printing cash on demand. You ve got to learn how to be able to go out there and make cash at will, flipping properties with no risk using none of your own money or credit. Once you get good at that and you have the confidence that you can print cash on demand, then you can move into some of the other areas of real estate. That s what I m all about. That s what this call s going to be all about. That s why I ve got Darren on the call, because let me tell you, I just got back from Las Vegas with a big group of friends. Darren and I we ve got a ton of friends in common. This big group of friends went to Las Vegas. We had a great time, but Darren wasn t there. I asked him just a second ago before we started the interview, Darren, what s up? Why didn t you go to Vegas? He said, Stacy, honestly, I ve got so many deals in my pipeline. I m making so much money. The thought of leaving and not getting these deals done, I just couldn t handle it. 2
That s how well Darren s doing. So I can t wait for you to hear some of the amazing things that he s doing. Again, if you pay attention to me at all, you know that I only put people in front of you who are doing this business and are going to share with the strategies and techniques that work right now in today s market. This isn t theory based interview filled with strategies that worked two or three years or even six months ago because in some cases, what worked six months ago isn t working right now. This is stuff that s working right now or I wouldn t have Darren on the call. Without further ado, let me introduce Darren Dicke. Darren, are you with us? DARREN: Yes, I am, Stacy. Great to be here. I appreciate the kind introduction, and I m excited to be here. All right, great. I told them just a little bit about you, but I know the story goes a lot deeper than that. Why don t we just start out by you telling us a little bit more about yourself and what you were doing right before you got started in real estate investing and what made you decide to get into real estate investing. Let s go all the way back to the beginning and we ll start there. DARREN: We re going to kick it old school today, huh? We re going to kick it old school. 3
DARREN: Let s see, so, I got started investing in real estate, actually dropped out of college three times in my late teens and early 20s because I just never could figure out quite what I wanted to do. I went from job to job to job to job to job to job and lived in three different states. I literally had 25 jobs in my early 20s. I settled down in a corporate job. I was climbing the ladder there. My dad called me day and he said, Hey, Darren. You ve got to check out these real estate investors. I was like, Really? He goes, Yeah, man. I ve been going to boot camps. I ve been going to trainings. I ve been meeting a lot of people who are making a lot of money investing in real estate, buying and selling houses. I m like, Seriously? He said, I think it would make a great new career for you. I said, Okay. So, he sent me one of Ron LeGrand, Ron LeGrand was the guy I originally learned the business from, and he sent me a Ron LeGrand Buying and Selling on Lease Options CD set. The more I listened to that CD set, I actually listened to it eight times. I was so excited. I m like, Man, he breaks it down. There are steps that I can follow. I literally didn t know what a 4
mortgage was when I got started. But I had faith that in what Ron said would work, and sure enough, I moved back to Columbus where my folks were. I was living down in Florida at the time. In my first year I bought two houses on lease option and turned around and sold them again. I put a little over five figures into my bank account. I was like, Sweet dude. This really, really works. So over the next four years is when I bought houses from the sheriff sale. I did sub-2s. I did rehabs. I did land contracts. I held rental properties. I did bank owned properties. I did a lot of stuff through the MLS and short sales. I just didn t really get into any of those niches because it was so involved. Like my first short sale deal I negotiated, I had an $80,000 check waiting on me on the back end and left town to go to Brazil for two weeks. I came back and I drove by the house and there an investor s For Sale By Owner sign on the front yard. I called the owner. I m like, Dude, what s up? We have a contract. And he s like, Sorry. This guy came along and he said he could buy right now. You re out of luck. So I m like, all right, there s got to be a better way. 5
Wow. DARREN: So that s when I decided to focus strictly on wholesaling. I actually kind of found it by accident. Ron LeGrand talks a lot about wholesaling. I did my first wholesale deal when I was across the country out in the desert in California. I was at some kind of boot camp out there for a week. Half way through the week I got an overnight envelope, and the front desk called me down. I went to my room and I opened it up. Sure enough, there was a check in there for $8,514. I was like, Nice. That puts a smile on your face. DARREN: Yeah, for sure. So, I m thinking, Wait a minute. That was on a four-unit that I found a cash buyer for. I wasn t there. I just instructed the title company a couple of weeks before I left, and I asked them to overnight the check to me and I gave them the address. Sure enough there it was. One of the guys that was in my room, he actually was so inspired by me getting that check when I wasn t even there. I never took title. I never took a tenant call. I never picked up a hammer. I never did all the other stuff that real estate investors generally have to do. Yep. 6
DARREN: He was so inspired by that that he actually quit his six-figure a year pharmaceutical sales job so that he could become an investor full-time. He s like, Dude, if you do this and you re in Columbus, Ohio, I m in Seattle, I could make five times as much money. Sure, he actually does. Yeah, there s some truth to that. His properties cost more in Seattle. DARREN: Exactly. But that was when the light bulb went off because I asked, I was so hungry when I first started this business. I asked every single person that I could meet. We took Lou Brown to dinner. Actually, Stacy, you were one of the guys that I looked up to too, because I learned from your probate course way back when. I would ask everybody the same thing. If you had to do it all over again, what niche would you focus on? Everybody had the same answer. Darren, it s a very personal decision, so I encourage you to buy a property. Try every single niche until you find the one that works for you. Once I got that check that s when I decided to outsource all my short sale leads, all my rehabs, everything out to somebody else, and then just focus solely on wholesaling. 7
That s when, it was about four years ago, that s when my business went from not very much every year, my business actually quadrupled that year. Nice. Nice. DARREN: And then the year after that is when I hired my first coach, and then it quadrupled again the year after that. Yep. DARREN: So, it s been over six figures a year every year for the last four or five years. I just feel so blessed to be able to do business the way that I do. Now I m getting to the point where, like you said Stacy, it s the perfect entry point into the real estate because now after seven full-time in this business, now I m just finally to that point where I feel confident enough that my market to know the areas that I want to invest in, to know the areas that I want to do the rehabs in, to know the areas that I want to buy and hold in. Because real estate investing, man, you make one mistake buying a house and that ll take you out of business pretty quick. Right. DARREN: See, that s one of the cool things about wholesaling is I place deposits. I place $100 minimum deposit just because I ve been to court before and the judge was like, Really? You only gave her only $10. How can I take that seriously? 8
From that point on, I was like screw that. I am never going through that again. I m going to place at least $100 just to be taken seriously. But that helps me to be able to be more solid on my numbers. Right, right. You gave a lot of great advice right there. I say time and time again, not only is wholesaling the place you should start, and of course, at the heart of my probate business I m just a wholesaler. I use probate to find my leads and then I wholesale the deals. I tell people that s the place, because you ve got to know how to make cash first. If you can t make cash, like I said, on demand, then you re going to be at a disadvantage right out of the gate. And then, another thing you said that I harp on people constantly as new investors, constantly and I tell them to do is the exact same thing I do is when I got start and the exact same thing that all successful people do when they get started. Darren just said that he did it too. I ve got an echo on the line, Darren. Are you hearing that? DARREN: No. How about now? Okay, good. No, no, no. It s probably my phone. I was just hoping you weren t hearing that. The thing that every successful person I ve ever interviewed has said, they all say the same exact same thing. It s like interview is so similar because all successful people do this. I tell people to 9
do it. I did it, is go out and take successful people to lunch. You just talked about taking Lou Brown to lunch. You go out and you ve got to have confidence. It took confidence to walk up to Lou Brown and say, Can I buy you lunch or dinner or whatever it is? But you know what? At the end of the day, Lou Brown, myself, we re all people and I ve got to eat. Lou s got to eat. I m not going to turn down a free meal as long as you re don t come off as a psycho or anything like that. So yeah, those are great, great tips. All right, so you decided that wholesaling was the way that you wanted to go. Let s talk a little bit about what you did. It sounds like you were doing several other types of real estate investing in addition to wholesaling at that point. You said you farmed all the other stuff out and you went wholesaling full-time. So let s talk about some of the things you did to focus exclusively on wholesaling. DARREN: What I did, Stacy, is I created a strategic relationship with folks here in my local market who focused their businesses solely on like short sales for example. So, every time I got a short sale lead into my pipeline, I have three relationships here in the city of guys whose sole business focus is to process through and to work. They have a system in place. They have lots of mitigators on staff. They have five, six, seven, eight person staffs, and that s all they do all day, is just 10
follow up on short sales. Right. DARREN: So then they pay me if they close on a deal which I m so happy to give up short sales because that s one of the most pain in the butt. I have high definition ADD and I have a hard enough time staying focused through some wholesale deals, much less with short sales where it s nine, twelve, fourteen, eighteen months and it s just constant back and forth and back and forth. Same thing goes with retail listing leads. See, whenever somebody calls in to my pipeline I want to try my best to provide them some type of professional service. Say the house is worth $120,000 and they asking $120,000 or $110,000, I ll let them know, Hey, your best bet is going to be to actually take this to an aggressive realtor. Do you have a realtor that you can use? If they say no, I just refer them to one of my three or four buys. Those are the guys that I like doing business with. I don t ask for anything in return from them just because in return I ll trade professional services with them. So I ll ask them for comparative market analysis and say, I m not really sure. I m having a hard time determining value on this house. Can you do a little digging and help me come to a value? And it works out really, really well that way. I just decided to focus my entire business model on straight putting properties in contract and just doing a ton, a ton, a ton, a ton, a ton of marketing. I ve tried pretty much every marketing technique under the sun and found a lot of really good ways to probate is just one of the ways that I use to market. 11
One of the reasons I love probate is because the deals that you get, it s such a diverse group of deals that you pull from. Here, we re talking million dollar houses, commercial properties, gas stations, vacant farm land. Yeah. DARREN: It s a little bit of everything, so that s what I really like about probate. But as far as wholesale goes, I stick to middle-of-theroad properties and below. Right. DARREN: I focus on what my top five buyers are wanting. I take these guys to coffee. I take them to lunch. I know that they re buying three to five properties a month. They re paying cash. Hey, I want to know exactly, exactly what you know, and I take them out with me. I say, Hey, here s a highlighter. Draw the exact dimensions of where I can heavily market looking for properties for you. Because the Ron LeGrands of the world, my original mentor, said the same thing. If I can trade three buyers for a list of 3,000 of just generic buyers, I would take the three buyers that I know exactly what they want, and they d buy everything that I put in contract. Mike Collins is another perfect example. That guy s been around the wholesaling game for so long, and he s got so much good information out there that that is focused on the three, take to lunch. Focus on the three guys that you know are buying one to 12
three houses a month because once you find out exactly what they re looking for then it s just a matter of buying the direct mail list and doing some driving for dollars and hanging signs in the area and really exploring every avenue to find exactly what they re looking for. They ll tell you how much they buy for and what minimum bedrooms and baths they need. Do they need to be two-stories? Do they need to have a basement? What s they re exit strategy? Are they buy-and-hold landlord? Are they just a rehabber and they want buy them and turn around and flip them right out? That s excellent advice. I ve said that several times. People ask me, when they do actually ask me to lunch and they ll say, I get this questions sometimes, Stacy, if you lost everything today, what would you do tomorrow to get it back? And I say exactly what you just said. I would go to my cash buyers, which I do anyway. This business is simple. Just go find out what your cash buyers are looking for. Are they looking for three bedrooms, one bath? Are they looking for thee bedrooms, two baths? Are they looking for two bedrooms? Are they looking for duplexes? Just figure it out. What are they looking for and then go find it and they ll buy it. This isn t brain surgery. DARREN: Exactly. And see, everybody s so preoccupied with, Oh, my gosh. I don t feel like I can be a wholesaler. I don t feel like I can flip contracts. Well, why not? 13
Because you got a list of 5,000 buyers here in Columbus and I only have 50. Well, guess what? That was 50 more than when I got started. That s right. DARREN: Talk to these people and find your one. All you re looking for is one buyer. That s right. That one guy is all you really need to get started, and that s good stuff. You brought up marketing a second ago. I want to talk to you about your marketing because I know you were doing some super cool ninja stuff with your marketing. You mind sharing some of that stuff with us? DARREN: Yeah, not at all. I ve had a lot of fun. The more time that I spend learning marketing in this business because when I got started I was broke. I was so deep in debt. I didn t have a penny to my name. I knew that getting leads was the key to doing deals in this business. So, it took me getting out of my comfort zone big time. But one of my favorite ways to find deals that still works today, and the only reason why I know it still works today is because I actually drive the streets of the neighborhoods where I buy properties myself. 14
I m looking for vacant run downs. I m looking for any type of distressed property because it doesn t have to be vacant for the landlord or the owner to be a disinterested owner. Right. DARREN: And I m also writing down the For Rent signs because landlords are some of the most motivated, that s actually the majority of my buyers right now, aside from my pocket guys, are the landlords. So if somebody s going to take one thing from the call today, I would highly recommend that you go find the area where your cash buyer is looking and write down every For Rent sign that you see and just call the landlord. Because I guarantee you, not one single other person in your entire market is calling landlords and saying, I m not a tenant, but I m just curious to see if you would be interested in selling this house. If they say no then just say, Okay. Do you have any other rental or rehab type of properties that I could take a look at purchasing? If they say no then say, Okay. Do you know anybody who does have properties that I could look at buying? If they say no then ask them, flip a script on them and follow up with this fourth and most important question, say, Are you actively building your rental portfolio right now? 15
Not only are you looking for deals but at the same time you re also finding buyers. I had one student that did this just for one weekend and he adding 27 names to his buyers list. See, he talked to each and every one of those landlords. See, landlords are the ones you don t have to sell. You just have to find exactly what they re looking for and they look at it and they know exactly how much it s going to cost to fix up. They know exactly what they can rent it for. They know exactly what kind of tenants they re going to get. They know all of that stuff. You just find them exactly what they re looking for. Dude, you ve got just a literal gold mine of unlimited leads and it doesn t cost you anything. Yeah. DARREN: It just takes getting out of your comfort zone and getting on the phone and really shaking your knees until you get past the first 20 calls, and then you realize these people are just regular people just like me. They love getting a phone call that s not like, You guys do Section 8? Do you guys accept pets? I got 27 cats. Can we do this? Can we do that? Oh, my God. Give me a break. Exactly. That is awesome. I hope everybody wrote that down. That is super, super secret ninja stuff right there. I m just going to repeat it just in case you didn t. So what he s doing is he s driving the neighborhood that his investors are looking for houses in. He s driving up and down 16
the streets that his cash buyer investors have told him they own properties in these areas. That s right, Darren? DARREN: Yep. So he s driving those areas looking for For Rent signs. He s calling the number on the For Rent sign. Instead of saying, Hey, I d like to rent your apartment, he s saying, Hey, can I ask you a few questions? I m an investor. I m looking to buy properties. Is this particular property for sale? If they say no, Do you have any other properties for sale? If they say no, you just say, Do you know anybody who might have some properties for sale? If they say no, then this super secret ninja question is, Well, let me ask you this, you re not selling, are you actively trying to buy more properties and build your portfolio? If they say yes, ching, ching, ching. You just rang the cash register because now you just found a cash buyer, another cash buyer, who will buy properties from you when you find them exactly what they re looking for. It s like Darren said, you don t have to sell them on the idea that they buy properties, they want more properties. You just have to go find them for them. It s brilliant, and it doesn t cost you a dime. A little bit of gas money and some time. That s all it costs you. That s awesome, man, that is awesome. 17
DARREN: And see, one of the cool things is once you find a landlord that says, Yes, I m actively building my portfolio, all you have to do to find inventory for them is just keep calling down your For Rent list. Take your legal pad and just write down all the For Rent signs. Just keep calling down there, and I can almost guarantee you it s not going to take any more than 10 phone calls before you find a landlord that says, Dude, I am so sick and f-ing tired of these kinds of properties. Yes, get it off my hands. Tell me what you can give it to me for. And see, now you know what another landlord in that area is willing to pay, because he just told you he was looking for a three-bedroom, one-bath in the $50,000 range. And if the guy says, I ll take $40,000 for it, boom lock that sucker up. And you know what? You ve already got somebody that s going to pay $10,000 more for it. Yep, brilliant. Brilliant, man. That is awesome. Tell us about some of your other marketing strategies. What else do you do? I know you do a lot of other cool stuff in addition to that. DARREN: Well, the two marketing strategies that work best for me aside from, see over the years I filled up a database of about 6,000 properties that I ve scrubbed it down from 10,000 to 6,000 that I got driving for dollars. I actually paid a guy to write it. Like he didn t have a car, so he rode his bike around town and found all these vacant run down properties for me. 18
I still mail to that list five, six, seven years later and every time I do a mailing, every time, the phone rings and I do a deal. So that s the key, one of the keys to my success. And my original mentors told me this, Hey, when you find something that works keep doing it, keep doing it, keep doing it, keep doing it, keep doing it. So that is a staple of my marketing is my drive-fordollar database. The second and third ways that I use to find deals are obviously through abandoned signs. And number three is direct mail. I love free-and-clear lists. I love out-of-town owners and just in specific areas where my buyers are looking for. Right. DARREN: Aside from that, man, you can get lists from the city of code enforcement violators and fire damage properties, just a ton of great free lists out there. And see, another avenue that I use in today s market that works really, really, really well is just with networking with other wholesalers. My business changed when I stopped viewing other wholesalers as my competition and realized, Wait a minute. These guys are doing the exact same thing I m doing in my market. So what I m do now when I have somebody that s doing it in cash that comes in I don t have anything in my pipeline, I ll just send a text or give a phone call to my 20 wholesalers here locally and say, Hey, I got a guy that s swinging cash. He s looking for a three-one on this side of town. What do you got for me, and I ll get three or four responses back. 19
So instantly I have property that I can call this back. I ll say, Let me go to my network and see what I can drum up for you. And sure enough, I ll call them back and say, Here s four properties for you. Go look at them, and then we all make money. Exactly. DARREN: So it s not about, at least in my opinion, I built my business around very inexpensive ways to market because in markets like Seattle where you re dealing in $400,000 houses, $2,000, $3,000 a month for marketing is just whatever. I want to keep as much of that money in my business as possible, so I spent a lot of time really figuring out what works and what doesn t with low-cost marketing. That s awesome. Now, I want to talk a little bit about your drivingfor-dollars database that you just talked about. I want to make sure that nobody missed because that s super, super powerful. If I understood you correctly, you said you paid a guy to ride his bicycle through the areas of town you were trying to find properties in and find you all the vacant and run down properties in those areas. Is that right? DARREN: That s it. And how did you have to pay this guy to ride his bicycle through all those neighborhoods? 20
DARREN: I actually paid him so much and so often, I started him off at a dollar a lead. But see, he would come back to his house and he would do all the research for me. So he would get onto the auditor site and he gave me the first 30 days before he starting selling the leads to other investors here locally. And I d get the first 30 days. And see, he only sent me leads that were what I call a confirmed vacant. Okay. DARREN: So what I call a confirmed vacant is basically just a fancy way of saying and absentee owner, somebody that their mailing address is not the property address. Okay. DARREN: so that s what my database is full of. It s just straight up absentee owners of properties that one time or another were run down, dilapidated, distressed, and I started off paying him a dollar a lead. By the time we actually parted ways a couple years ago he was up to $2.50 a lead. Wow. DARREN: Plus, I would pay him a small percentage of a deal, any time a deal, I set aside about 25% of every deal just for folks who are responsible for a deal coming into my pipeline. I would pay him 3%-5% and he was so happy. That really changed, especially when I had my bandit signer. 21
I went through bandit signer after bandit signer. My coaches were like, Yo, D, you re having such a hard time with attrition, why don t you just pay him a bonus? And sure enough, I started paying $300, $500, $475, $225 bonuses just unexpected out of the blue and these guys are like, Call me. Let me do some more work. C mon, man. Let me do some more work. Right. DARREN: Now it s in their best interests to make sure that the leads are the best, that the signs are hung in places where they re going to stay up and be most visible because they know as I m closing deals not only are they going to get money now but they re also going to get money, potentially down the road. Right. DARREN: And a lot of things changed for my business because I was trying to keep everything myself. My coach was like, D, come on, man. There s plenty to go around. Let s keep everybody paid so that everybody wants to stay and to be a part of the team. Awesome, man. That s great, great advice. Take care of the people who take care of you is the essence of that story right there. Now, so this guy rode his bicycle and built this property of confirmed absentee owners or confirmed vacant is what you 22
call them which is your fancy way of saying they re absentee owners. He did all the research. You re paying him between a dollar to $2.50 a lead, and you said he built you a database of 10,000 of these properties? DARREN: Yep. Twenty-five hundred were me. It only took me about 2,500 leads to get to get to the point where I officially retired myself from driving for dollars because all it takes is mailing to about 100 leads. The first mailer I mailed the yellow letter. Yeah. DARREN: And then every mailer after that was just a straight up postcard that said, My name s Darren. I buy houses in the area, vacant, run down, fire damaged, it doesn t matter. Call me. And the reason why I continue to mail to that drive-for-dollars list is because I have literally when I mail the yellow letter to a fresh drive-for-dollars list I will literally get between a 25% and a 50% response rate. Wow. DARREN: So, I m mailing out to 100 people and I m getting between 25 and 50 calls. So you can see where I don t have to have that many leads. That was his goal every week was just to get 100 leads and get 100 leads and here s the area today. Go get 100 leads because I d mail to 100 leads and I d had somebody writing all the letters for me. It was a little more time and cost intensive, but the results were 23
just the results were just amazing. I couldn t believe it. Yeah, that s awesome. Twenty-five to 50% response rate off direct mail is off the charts. A 1% response rate in direct mail is usually considered good, 2%, 3% is great. You re getting 25%- 50% that s phenomenal. Astronomical. That s awesome. DARREN: How that came about is I had a sister-in-law that was just pregnant. She was staying home, so she was handwriting all the letters for me and hand addressing all the envelopes. When somebody takes that kind of time and attention, people can tell that. I ve tested it with the handwriting font as opposed to the actual physical handwriting on the envelopes and on the letter, and man, there s no comparison. Yeah. Yeah, handwritten letters always going to pull better than just a handwriting font. DARREN: Now one thing that I will can I add something real quick just to the driving-for dollars thing? Yeah, absolutely. DARREN: Because a lot of people are probably listening to the call, they re going, I d love to get started with this but I just don t have the money to do mailers. Hey, listen, the easy way around that is just to find these vacant 24
run down properties and just go back home and get on your computer, pull them up on your county auditor s website and find out who owns them. And then, you re literally just going to go to White Pages. Well, two websites I use. One is www.whitepages.com and the other one is www.zabasearch.com, Z A B A search.com. So, www. zabasearch.com. Those two websites are free and you can go and you can search out these people. So go to the auditor s website and find out who the owner is and where they live. And then, just go and go to www.whitepages. com and punch them in with their city and state and look for a phone number. And if you find the phone number, then just all them up and say, Hey, my name is John Doe and I just drove around the neighborhood. Your house looked like it was run down, potentially vacant. It was located here. Do you have any interest in selling that house because I m looking to pick up more rental houses in the neighborhood? And if they say no, then just go down that list of questions again. You can keep it conversational and just say, Hey, it s great to meet a fellow real estate investor. Did you ever rent this house out? How did you like the tenants? What kind of success did you have and where did you find the best tenants were coming from, and just keep it conversational with folks because we re all just real estate investors. Being a property owner is sometimes is really, really, really tough. And to have somebody to call that s just like, What s going on in the neighborhood? I m thinking about picking up some properties. I just wanted to call all the owners of the vacant run downs and you don t know anybody in the area of in any other areas around town that may have properties for sale. 25
The more conversational that you can be with people, I m telling you, man, I just literally, this morning I just got off the call with a brand new student who went out and he was doing this exact thing. He only has seven For Rent signs that he found. And number six was a house that this woman asked $90,000 for and he s just like, Dude, whatever. That s full retail. Sure enough, she calls him back the next day, which was yesterday, and she said, Hey, Rob, actually we owe $48,000 on the mortgage and we re going through bankruptcy and it s really embarrassing, but is there anything you can do to get this property off of our hands? And he said, What about owner finances, and he started asking the questions. And sure enough, that s a 60 on the dollar type of property that just straight up. There s going to be owner finance there. And she called back that very next day. He felt there s no way, but she must ve talked to her husband because that s the thing, landlords do not get calls. When they stick a For Rent sign in the front yard, they do not get calls from anybody for except for, Do you guys accept dogs? How about smoking? How about waterbeds? How about this? How about that? And it s such a breath of fresh air because she had no idea how to take that call, and she probably talked to her husband about it that night before. I was just telling Rob this, I said, Dude, they talked and they were liked, Man, we ve been praying about this. And this might be the person that God is sending to take care of this big problem because it s a huge stress. He just told me this today. He met with them to grab their Bank of America mortgage statement. He met with them today and 26
they said, Oh, by the way, I forgot to tell you. We ve got two other houses that are going to be in this bankruptcy too. I said, Ding, ding, ding, ding, ding, ding, ding, buddy. Ching. DARREN: Exactly. Cha-ching. We re going to the bank. Go get those two statements and let s sit for coffee and let s figure out how to turn these into deals because they re very, very motivated. But see, when he talked to them at first they were not motivated at all. I want $95,000 for the house. And he was like, Okay. There s nothing I can do. He asked all the questions and he gave them him number. And sure enough, they called him back the next day. It s just a numbers game. All it takes is getting in front of enough buyers. Just keep at it. Keep at it, keep at it, keep at it, keep at it, keep at it and good stuff. It can t help. It s a science. This is not theory. This is what s being proven time and time and time and time and time and time and time again. Time and again, always. Just keep doing the activity. Keep it up, keep it up, keep it up. Absolutely. I could not agree more. A great way to look at it is to 27
not look at when you get a no, don t look at that as rejection. Look at it as you re one step closer to someone saying yes and doing a deal. You have to think like that in the beginning or you might get discouraged because literally, every no puts one step closer to a deal. But that s an awesome story. That is so, so awesome. All right, well, let s switch gears real quick. We talked about marketing. I know that you re doing some super, super cool stuff with marketing. Let s talk about what happened after you get the phone call or the phone call comes in. Where does the phone call go? And let s talk about where it went in the early days? Did it go straight to your cell phone? And where does it go now? Do you have your system automated? Does it go to an 800 number? Are you driving them to a website? So you re going out, you have your guy out there on his bicycle. I can just see this guy riding around town, toot, toot, toot, toot. Ringing his bell, ding, ding, ding. Then it leads back to you. You re building your database and you re sending out postcards. Where does the postcard tell them to go to? Does it tell them to call you? Does it tell them to go to a website? Where are you sending them? DARREN: Stacy, I tested it out where I ve done mailings with just my web address, and just my phone number, and my phone number and 28
web address. The results that I got best, hands down, was just a phone number. I used to have a live 24-hour operator. On my postcard I call to say call 24 hours a day to speak with somebody live, somebody in our office live. But now, it s a 24-hour recorded message. Dan Doran and Richard Roop use that a lot, the free 24-hour recorded message. And I just switched over because I just wasn t getting my results. My answering service just really the quality of leads wasn t there and they were mixing things up. We had to cancel all that out. But now that I ve switched over to the PBNext voicemail system. Okay. DARREN: We have a live recorded message, and that s like our office number because there re are options there for now press 1 if you re a buyer, 2 if you re a seller, 3 if you re a private lender, 4 if you re a realtor, 5 if you re looking for Chad, 6 Marie, 7 Darren and on down the list. They push seller and they listen in. So, I can see on the website how many people call, what options they pushed and how long they listen on the phone call. The leads that I m getting now, actually I m getting a lot fewer leads now than I was with my live operator service, but it s costing me about 1/80th of what it was costing with my live operator service. 29
Wow. DARREN: And so, the leads that I m getting, when they do come through, they are, ho-wow, they re like almost every single one of them is lay down. I mean, I pretty much do a deal one out of every three, four, five times I get a lead from my voicemail service. That is awesome. That s absolutely amazing. So, you were using a live operating service. Were you using Live? DARREN: No, I found a company out of New York that when we had an account rep I used to highly, highly, highly recommend them. I sung their praises from the top of the mountainsides and everybody that I talked to, man, this company was so awesome. But the account rep that we have, man, they just got messed up so bad internally. It was a real battle to get out of their service. We were talking to the owners and documenting everything. Wow. DARREN: No, it wasn t PATLive, but PATLive is a service that they are all about real estate investors. Right. 30
DARREN: And they have all the scripts. For me, it was just a little less cost effective than what I wanted to pay. But there s tremendous value in using a company like PATLive, because they ve already worked out all the kinks. See, I had to train my live operator service, and I was calling. If you do have live operator service, I highly, highly recommend you calling in at least once a week to act like you re a seller or a buyer. It was good thing that I did that because they said, One of our realtors is going to back in touch with you very soon. And I called the owner right away. I said, Yo, yo, yo, yo, yo. Whoa, whoa, whoa, wait a minute. Wow, yeah. DARREN: We re not realtors. Put a memo out right now. If anybody says realtor, broker, any real estate terms I m shutting it down right now. It s done because we will get in so much trouble doing that. Right. DARREN: So, it s totally simplified things now that I m at the voicemail service. It s great because the whole team, we just get an email now. And it s a voicemail, we push play, and there it is, and it s got the caller ID number and the heading on the email. Even if they call from a blocked number it still pulls up their telephone number. It s awesome, so awesome. 31
Awesome. And that s the PBNext system that you re using, right? DARREN: Correct. Okay. So you re using PBNext. The leads are coming in, you re listening to the voicemails on your computer. And then, how do you decide which ones to call back and in what order? DARREN: I ask people to leave their phone number. I ask them to leave the property address, and I ask them to leave why they are selling. I just keep it very simple. And for the folks that return the voicemail, I ll actually have people call and say, Hey, I m looking to rent a house. And I ll call them back just to see what s going on because they may say one thing but it may turn out to be that they were looking for a rental house that they wanted to sell. If a lead comes in, literally, I call everybody back just say, Hey, I got your message. Sorry it took so long to get back. More time than not, Stacy, I just don t understand it but you may have this same experience as well where it s like I ll call a lead back, I did this a couple weeks ago and I feel so bad but sometimes it happens. I called this guy back two weeks later. He s like, Oh, my gosh. Thank you for calling me back. Real investors are real in this town. I m like, What do you mean? 32
He goes, I have called 10, 10 We Buy House signs, 10 We Buy House ads on Craig s list, and you re the first person to call me back. I was the last guy he called. That was over two weeks ago. Wow. DARREN: So he didn t get single call back. So anybody that s listening to this call today, don t worry about competition because competition is non-existent in this business. Don t give other real estate investors more credit than they deserve because I promise you he s not the only guy out there that calls 10 real estate investors and he only gets one call back. Right. DARREN: If you re actually making those calls and then turning it around, then just let them know right up front, Hey, dude, I m going to submit you with two written offers. One s for cash. It s going to be a lowball offer, but market sucks right now. You understand that, right? He s like, Yeah, yeah, yeah. That s no problem. And the second one will be for me buying the house and just getting you closer to your asking price if I can make you monthly payments. And if he says, Okay, cool. Send them both over, if you can 33
submit offers, sometimes see, I submit offers in writing, Stacy. And sometimes, I will get people that call my office back and they ll cuss my office manager out and say, Are you kidding me? You are insulting me. I can t believe you even have a straight face and blah-blah-blah-blah-blah, one side and down the other. And told Marie just hang up on those people from now on. They re not worth your time, whatever. This guy called back six months later and said, I m looking for Darren. Is his offer still good on this three unit over on East 8th? And sure enough, I met the guy out there. He was asking too much, and we couldn t work out a deal. But that s where submitting actually a written purchase offer is so powerful because can I tell a story about this deal that I m actually closing tomorrow, one of the reasons why I didn t go to Vegas? Yeah, absolutely. DARREN: It was a house in the north campus, Ohio State University, OH, baby. Yeah, I m a huge, huge, huge Buckeye fan. It s on the north side of campus, and literally, this guy, I talked to him initially 18 months ago. I said, Hugh, that s $68,000. He stood firm on $68,000. I ran my numbers and they came back at $25,000. So, I submitted him a written offer at $25,000. 34
And he called back and said, Sorry, you re too low. And I asked him if it would be okay if I followed up each month until either he sold it or something happened. He said, No problem. So literally, for 15 months I called this guy 15 separate times. And every time it s, Nope, still asking $68,000. Nope, still asking $68,000. Nope, I went with the appraisal comes back at. Nope, $68,000. I ll call back and ask this guy, I said Hey, it s Darren Dicke. We spoke a month ago about the house. I submitted an offer at the time. Is my offer still too low? And that way they can say yes and deny me and it doesn t hurt on either side. Is my offer still too low? Yes. Now see, I called time number 15 and I said, Hey, Steve, it s Darren Dicke. He s like, Ho, my gosh. I m so glad you called. I said, Man, how s it going with the house over there? He said, You know, my nephew is just going to close on the place and he backed out at the last minute and the estate needs to settle now. I m sick and tired of it. 35
I said, Well, is my offer still too low? And he said, Can you come up just a little bit on your offer and we ve got a deal? I said, Just a little bit. Look, a little bit like what? $27,500? And he said, Done. He said, Fax over the contract. I will submit it to my attorney. I ll get the approval. I ll sign it and get to work on it and make this thing happen. So, we literally had to go to I had to find a private lender for this gal because she was preapproved. We went two days before the closing table and it blew up and now the estate s already got egg all over their face because they asked the court two times to come back and let us extend it, let us extend it. So it s like let s find somebody to close it out. So we re actually closing it tomorrow. I sold it for $38,000, so I m going make $10,000 on the deal. I worked harder putting this deal together than I have ever worked on a deal before. But you know what? It s a buddy of mine. It s his girlfriend. It s her first house. We got her into a lease purchase. She got a great deal on a house, 50 on the dollar. They re going to move in there. They re going to fix it up. It s a beautiful house. I actually thought about buying it myself as a buy-and-hold rental property. But he really was very persuasive and dude I want this house bad, I want it bad, I want it bad. So fine, here. I ll sell it to you. Let s work to get this thing done. 36
But see, that s the power of following up. That, again, was my original mentors; Dan Doran, Dan Kennedy, Richard Roop, these guys that made a living out of marketing. And they all said the same thing: Follow up. It s like with direct mail. It s not that first mailing that goes out. It s the times four through eight, where if you can separate yourself from everybody else out there. Real investors as whole are lazy. So if you can, set a consistent follow-up schedule. It literally took two minutes once a month to call Steve, two minutes. And do you think that I m glad I spent I literally had two hours in the deal from the time I inspected it to the time I shot the videos, uploaded it, sent it to my buyers list, blah-blah-blah, the whole thing. There was not that much time invested in it, but that follow-up time number 15 was the one that literally, I hit the jackpot on it. See, I actually got to give him $500 more dollars on the property to extend the contract. So he was super happy, she was super happy, I m super happy. It s really a feel good deal, because we got to solve this guy s problem. That s one of the cool things about probate, Stacy, as you know, because properties do become a problem to these folks. Right. DARREN: And their executor, and they were the responsible one in the family because they have lives to live. So now, that it s a problem and the attorneys are calling them saying, Cha-ching, the meter s running. Cha-ching, cha-ching, there goes your guy s inheritance. Let s get this thing closed. Let s get it closed. Let s get it closed. 37
Ooh, okay. Let s get this off their plate. Take it away from me. It s a problem. Please, please, please, please. Yeah. The fact that you followed up is absolutely amazing. I ve lost properties that I forgot to follow up on. It s so, so important to follow up every month. This one REO comes to mind. About five years, I had lowballed the bank. They said no, and then I usually go back to the bank every month after that, just like you were talking about. Around month five or six, I forgot a month. That was the month that it sold, and it wound up selling for less than I had originally offered the bank in the first place. I was so pissed. The follow-up is so important. DARREN: Now let me ask you, how much profit did you lose out on that deal just so folks can relate just how important follow-up is. Yeah. I was just going to flip the property. At the price that I had offered the bank I was going to make about $10,000. It went for $10,000 less than I offered the bank, so I lost $20,000; $20,000 for not following up. Some people work all year for $20,000. DARREN: Exactly, exactly. And see, that s one of the cool things about our business is that all it takes is that one deal, boom, there it is. Your whole year is paid for. Absolutely. 38
DARREN: I m glad to hear that you have similar stories about missing out on deals from not following up. And see, like you said, it s not brain surgery. It s not rocket science. We re not sewing people s brains back together. It s just the numbers game. Do as much marketing as you can do, and every time you get a lead in, keep it in some kind of folder or a computer program or something, so that it ll remind yourself to follow up once a month, and just stay in touch with these people. So what if they cuss you out and they call you bleep-bleep-bleepbleep-lady s-bleep-bleep-bleeps. Just keep following up with them. It s not personal. It s just a numbers game. That s what my numbers say. The market sucks right now, guys. I m sorry. Two years ago I could pay you 50% more for the house. But today, the news is not lying. The value is just, most neighborhoods, has disappeared. Yeah, absolutely. Let me ask you this regarding the follow-up, how do you follow up? What system do you use? Do you use an online system to follow up that reminds you to follow up on properties? Or some sort of computer software that you open up your every morning and a popup appears, Hey, Darren, don t forget to call soand-so back. It s been 30 days. Your last offer was this. Do you use some sort of service like that, or are you more old school? Do you just use an old fashion tickler file? How do you keep track of who to follow up with and when? DARREN: That s a great question, Stacy. I actually used to use just a straight up filing system where I had one folder that was just follow-up. And every month I d go through and I start at the very beginning and I d just make all the calls. But then I moved to a program called Real Prospect. And that s a really cool program that allowed me to that s the one that as soon 39