It’s great to have you, Susan!
Thank you, Stephan. It’s so great to be here! Thanks for having me.
Yeah, so let’s start by, if you could share a little bit of how you got from where you were before you started investing in real estate to where you are now-I mean, there’s a progression here and presumably, somebody who’s listening to this episode, they may have never invested in real estate before, and they’ve got to take a progression themselves because they can’t just have 600 real estate deals under their belt on day one so how did you get started and how would somebody else get started and build that portfolio up?
Great question! So, as you mentioned I started investing in real estate back in 1994, so it’s been a minute or two, but all this has happened. You’re right, it definitely doesn’t happen overnight, and I think that’s, unfortunately, more than a big misconception about real estate investing, and one of the things that late-night information gurus, one of the things they might have done to our detriment is to make it seem like it’s a “get-rich-quick” type of business and real estate is pretty much a “get-rich-quick slow” or “get-rich-slow” type of business and you have to be in it for the long haul. Back in the olden days, when I was in college, I went to work in the car rental industry, so I was with Dollar Rent a Car for five years, and then I was at Hertz Rent a Car for 11 years, and I always had, what I call, the side gig.
I had this entrepreneurial streak, something that a lot of us entrepreneur share where we all started businesses when we were kids, whether it was selling candy as I did or going door-to-door selling air fresheners or I started this babysitting syndicate because there were lots of people who needed babysitting services but I personally didn’t like babysitting so I started pimping out all the other girls in the neighborhood and handling their scheduling and so forth and making money off of my little babysitting syndicate so I always had a little something going on the side, and it was no different when I worked in the car rental industry. When I really got serious about investing in real estate was after I had worked my way up the corporate ladder at Hertz Rent a Car. I’m based in Denver, Colorado, that’s where I lived and I’ve lived here since I was 15 years old so I consider myself just about as close to a native as you can get, and when I rose through the ranks at Hertz and went to corporate headquarters, the corporate headquarters was in Northern New Jersey-up in Park Ridge, New Jersey-and so, I was working in New Jersey, living in Manhattan, and I was on the road three weeks a month.
I was a national sales trainer and my job consisted of leaving town on a Sunday afternoon and flying to some destination in North America, spend all week training the staff in a specific city and then come home on Friday night only to turn back around Sunday afternoon to do it again. I got super burned out on that so I was living in an area where I didn’t really know anyone. I was far away from home and my family. I had a job that I was on the road so much that it wasn’t just fulfilling at all and so I really started trying to find a way out and I had begun real estate investing on the side and I just thought, “I’m going to leave Hertz and I’m going to try to bust it on my own and become a self-employed real estate investor,” and that’s how it happened. I left Hertz back in late 1998 and probably left my job much too soon because the cash flow from my real estate holdings wasn’t really enough to cover my monthly expenses, my personal expenses, so I decided to take a job at a mortgage company where my sister worked because usually the number one constraint in every real estate investor’s business is the funding and the financing piece of it. Lenders are very wary of real estate investors so it’s difficult to get an investment property loan-it’s very difficult to qualify for them especially more than just a few. I decided that I wanted to really learn how to eliminate that constraint-not only for myself but also for others.
If your business is boring, it’s your fault.
I kind of viewed this mortgage job as an on-the-job training and I had a plan that I would spend about a year or so of learning the business and then I would leave there and start my own mortgage company, which I did, and I had that mortgage company for about eight years and that’s where I did the majority of my investing-you know, starting with single-family homes and work my way up to apartment buildings, put together investing syndicates, which are just group investments, work with investor clients and funding of their deals, put together a private equity fund to fund deals and become a private lender. We just did all sorts of exciting things at the mortgage company and because I’ve really cracked this constraint and eliminated this issue of funding. When the mortgage collapse in this country happened in 2008 and I had to close my mortgage company, it was just a natural segue to begin training and coaching real estate investors so that they could learn how to creatively invest and fund their deals themselves. And so, that’s what I’ve been doing with my company, The Investor Insights since 2009.
Awesome! You figured out a way from the beginning, basically, how to get leverage. You told me this before the episode and I love this saying, “If your business is boring, it’s your fault.” So, you didn’t like babysitting so you got babysitters to do the work you didn’t like and then you just profited off of their work by scheduling them and getting them booked and so forth, that‘s genius! Then you took that into your adult life and every opportunity where you can get leverage, you do it and that’s amazing!
Yeah, that’s what capital does, right? So, when we’re talking about leverage just conceptually, that’s what capital allows you to do as a real estate investor. If you can get access to cheap capital, whether it’s institutional, capital, or capital from individuals, which is basically the term private money means, then that’s just leverage in your business and that’s how you’re able to grow. I know that the real estate investors who come to work with us and are trying to fund their deals with their own cash or with their own retirement accounts, and try to be a debt-free investor or not have any funding or financing or loans or liens against their properties, referred to as “free and clear,” I think that’s a huge missed opportunity in terms of financial leverage and I know for a fact that my portfolio right now in real estate as it stands is about 740 units all across the country and I never would have been able to fund 740 units if I had to come up with cash out of my own pocket in order to fund those deals so you’re right about leverage. I look for it every single place I go and I think that it’s probably just, I’ve come about it, honestly, because that’s inherent in what I do as a real estate investor.
Right, so the term, I guess, is O.P.M. or Other People’s Money, right?
Exactly, right!
So, where do you get your best deals whether it’s a single-family home or an apartment building or whatever? Are you going to auctions? Are you looking at short sales? Do you get access to special secret websites that have all these listings? Where do you start?
Yeah. I mean there are lots of ways that you can start and lots of ways that you can get access to deals. In fact, I have this one training program called, Getting the Deals-pretty appropriately named and I kind of teach 65 different ways that you can access leads, basically, deals and certainly auctions are one. I have, you know, over the course of my career, I certainly have purchased preppers at auction. I’ve purchased short sales. Any type of distressed property or deeply-discounted property. You know, we’ve talked before about bank R.E.O.’s which just means, properties that the bank has foreclosed on and they’re holding on the books and trying to get rid of. Usually, they are offered at very deep discounts and that’s all, typically, with like single-family investing. Now, I’ve kind of reached that point in my career where I am very lucky, right? I enjoy a certain level of status in my market because I’m now recognized as an expert and somebody who can get deals closed.
And so now, I get the benefit of people inviting me to be part of their deals and so again, going back to that concept of leverage, what I usually focus on now is helping people bring big group investments to a close of multi-family or apartment buildings so we’re talking like, 2 and 300 unit apartment complexes. Typically, somebody can get something together enough to get it to about the 20-yard line but the minute we’re in that red zone, then that’s when they start to run into issues in the final underwriting and kind of getting that thing closed and getting it over the finish line and I’m lucky and that’s usually where I get invited in to help them bring it to the finish line and so then I’ll get a piece of the deal in terms of cash flow and equity. I’m able to kind of leverage myself into a position into other people’s cash flowing deals just because I have that ability and that level of expertise so it’s a pretty exciting place to be but you know, like you say, it doesn’t happen overnight-this has been over the course of a 22-year career.
Let’s just define a couple of terms for folks who aren’t really that familiar with real estate investing. So, you mentioned R.E.O. You mentioned tax liens. Let’s just quickly define those.
R.E.O. stands for real estate owned.
Sure. R.E.O or a bank R.E.O is an acronym that stands for real estate owned. It’s a bank term it just means, hey, this is on our balance sheet as an asset that isn’t producing any income. It just means that they have foreclosed on a property and they haven’t been able to dispose of it yet, so it’s sitting on their books doing nothing except for penalizing them for a lot of reasons and so, they’re usually pretty willing to let those properties go at a steep discount. Tax liens, means if you don’t pay your property taxes then the county that your home is located in will usually put a tax lien on your property and they’ll auction off that tax lien and people like me will go to these tax auctions at the counties and we’ll purchase tax lien certificates and usually when those tax liens redeem-meaning, if you decide to pay off your property taxes and pay off your back taxes, there’s an interest that gets passed along to us, investors, who actually hold those tax lien certificates.
Back in the day when I was doing this actively in the counties here in Colorado where I was investing it, these liens were paying about 16% interest and so that was the good news, right? So, if they redeemed then we got our principal returned plus we got the interest, and you know everybody thought it would be a really bad thing if you bought this tax lien and the property didn’t redeem but honestly, what you get to do then is apply for a treasurer’s deed to the property and you can take control of that property and we were able to do that on a couple of properties as well. There are all sorts of you know, real estate investing is kind of like internet marketing, right? There are so many different ways that you can get to the finish line-so many different strategies, so many different tactics, so many things, and different ways that people are making money. With real estate, so many different types of moneymaking strategies and ways to get to the final result, which is, obviously, to have a nice portfolio of cash-flowing properties or transactional income as a result from sales.
And while it gets back to your original premise that, if your business is boring, it’s your own fault. So, if you don’t like flipping houses don’t do it.
Which I don’t. It’s true! We were talking before the call started, it’s like, I can make that parallel in both businesses. In my real estate investing business, it’s true. I have tried, over the course of 22 years, I have probably tried every single real estate investing strategy and tactic that there is. I’ve been a rehabber-I don’t enjoy rehabbing. I’ve tried to short sell houses-I don’t enjoy the short sale process because you’re dealing with banks. You know, I realized pretty early on in my career that like, wow, you know, single-family homes are tough from a risk perspective because if you have a rental and it’s a one-family property, the minute that family moves out then you have zero income coming in from that property and then I’m going to have to subsidize that mortgage payment paid out of pocket until I can get it rented again. That’s risky from a cash flow perspective.
Don’t do it if it’s not fun.
I figured out like, if I buy a four-unit property and I have four families in there, if one family moves out, I still have 75% of my income coming in on a monthly basis and chances are good, I won’t have to come out of pocket to subsidize that mortgage. So, I’ve really looked for ways to minimize my risk and also focus on the type of investing that I enjoy and what I enjoy right now is just exactly what I described-working on these larger group investments, also known as real estate syndicates, on 2 and 300-unit apartment buildings and kind of leveraging my expertise in advising and consulting with other people into getting a piece of that deal in the cash flow and equity as opposed to having to do all the grunt work that I had to do back in the day. So, and with the training business, it’s like, look, if something is boring or I’m not having fun with a piece of my business then, you know what, the only person I have to blame is myself. Don’t do it if it’s not fun. If it doesn’t turn you on then find something else that does within that context and let’s go with that. You know, business isn’t supposed to be boring or not fun. I fully believe that, as entrepreneurs, we have the ability to pick and choose what we want to do and if that’s true, then why would we, intentionally, pick or choose to do something that we thought was boring or unfulfilling.
I love the way that Abraham Hicks describes life on this planet is about sifting and sorting and that’s the case in business. It’s just, it’s life, right? So, if you decide to work in something that you don’t enjoy or to put a lot of your time into a hobby that doesn’t really fulfill you or whatever, all you have is yourself to blame. Absolutely. So, the typical progression of like starting with a single-family home as your first investment and then going to multifamily, and bigger apartment complexes, and maybe commercial real estate, and so forth, is a mistake if you don’t enjoy single-family homeownership.
You might want to just figure out to own a piece of a multifamily property and start there instead because there’s cash flow benefits, as you said, where you can have even three of the tenants still paying you and the fourth one moves out so you’re not getting hit with zero cash flow and also, it’s less headaches. So, what would be a kind of a system or process that you would advised and maybe you just want to recommend a particular info product that you sell or training course or something. If somebody wants to get started in this, they want to own a piece of an apartment complex, for example, or multifamily unit or whatever then, they don’t have the money to buy it outright, they want to use O.P.M. or Other People’s Money at least in part so where would they go to learn this system and how to do this?
Well, I tell you these days, it’s a lot easier than it was back when I first got started, just, specifically, with regard to kind of the example that you just gave. If there’s somebody that’s listening to this and say, “Hey you know I would really love to get a piece of a 2 or 300-unit apartment building but I don’t know how to analyze these deals, I don’t know how to underwrite these deals, I don’t know how to fund them, and I don’t know how to manage them-“ You know, all those usual kind of scarcity mindset thinking that always comes up and we’re trying to think about doing something new no matter what it is but with crowdfunding, I mean, many of these problems now are completely solved and wide open for what I would call the passive investor.
There are passive real estate opportunities right now that allow people to diversify their investment portfolio into real estate without having to take that active role.
The type of investing that I’ve been describing up until this point is all active investing so I’m seeking out the deals, I’m analyzing the deals, I’m raising the capital, I’m managing the deals, and I’m an active real estate investor but there are passive real estate opportunities right now that allow people to diversify their investment portfolio into real estate without having to take that active role. I’ve talked to so many people who are like, “Look, I’d love to own real estate but I have no desire to be a landlord,” and they usually cite, you know that old saying to me: “Toilets, trash, and tenants.” Those are the three things they don’t want to deal with as a landlord and I get it. I don’t want to deal with those things either because, you know, especially toilets and trash, that’s gross. Tenants can be cool but sometimes, they can be not so cool when they don’t pay. And so, with crowdfunding and, specifically, a couple of real estate specific crowdfunds that I personally invest in, they offer pre-vetted deals from online broker-dealers and, as a result of the JOBS Act and the crowdfunding guidelines that were finally finalized by the F.C.C. just recently, it’s opened up these crowdfunding platforms to people other than, what we call, accredited investors so back in the day, you could only invest in these types of pre-vetted investments that were these syndicated real estate deal, where as a group investment, you really just take a passive investment role: you invest your money and then you get to take a return either a debt return or an equity return each month.
Previously, these opportunities were only available to accredited investors. People who had a net worth of a million dollars or more exclusive of the equity in their primary residence or they made a minimum of $200,000 a year in salary or $300,000 jointly with their spouse, that’s the definition of an accredited investor and so, a lot of people didn’t meet that requirement and they were kind of shut out of that system. Well, now the JOBS Act changed all that and so it’s open to non-accredited investors and anybody can invest in these platforms. To that, I really love deals that, I think, meet my specifications in terms of risk mitigation. They offer a lot of multi-family properties and they offer a lot of, what we call, debt deals where you’re funding other people’s deals. Or Realty Mogul and fundrise.com. Realty Mogul, in fact, last year was syndicating the renovation of the Hard Rock Hotel in Palm Springs and so, I was like, “Hey, that looks like a pretty fun investment!” so I got to invest in the Palm Springs Hard Rock Hotel. Now, one other person can be like, “Oh, yeah! I am an owner of the Palm Springs Hard Rock Hotel with all the V.I.P. privileges that it affords.” so you know, that’s just part of what these crowdfunded opportunities offer. Somebody else does all the work. You get another layer of security by having someone who is licensed. That, these deals before they even make it on this broker-dealer platform and then you’re in it with a bunch of other investors and other owners who are buying shares and units in these properties and, honestly, it’s as easy as you just sit back and get an email notification when they deposit your return in your account.
But what if you wanted to be more active and say, a penthouse suite in Las Vegas. What would be the process to ensure you get a really good deal there? I actually have a friend who we met through Tony Robbins’ Platinum Partnership and he made a great investment in a property, a penthouse suite, in Palms Palace and it just takes like, one or two weekends and he’s covered with the mortgage for the month. He rents out most weekends and it’s incredible, the value that he’s gotten and I would not have known how to get that kind of investment but he just knew what he was doing. What if I wanted to own one particular property like that?
Yeah, you could do it the old-fashioned way, he could just reach out to a real estate broker and say, “Look, this is what I’m looking for and this is the cash on cash return that I’m looking for.” If you’re working with a broker that’s used to working with real estate investors then chances are good that they’ll be able to come up with something for you and then, you put together the funding and you buy it. What you described as a vacation rental or like a short-term rental, some guys that are making money right now, like cleaning up on Airbnb and offering the short-term rentals. If you’re going to go with a different type of opportunity where, you’re going to offer a long-term rental, you want to get a long-term renter in there. Then, you’re going to have to pay attention to market metrics like where can I get the biggest bang for my buck? We refer to that, internally, at least I do, as the price-to-rent ratio so we want to make sure that the price that we’re paying for that property and the rent that we’re going to be able to collect for that property are going to be where we need it to be so that we can make a profit.
I actually have a tool called the price to rent comparison calculator that I sell with a couple of my programs that just allows you to compare up to like, three different metropolitan areas to determine like, “Hey, where am I going to get the biggest bang for my buck?” Right now, at least at the time that we’re recording this, the biggest opportunities for rental properties that afford you the highest priced right ratio are going to be in the Midwest like Indiana, Ohio, and Michigan. You know those are kind of the big three and of course, in the Southeast as well where you’re going to be able to scoop up properties for and you’re going to just die when I say this because everyone does but we have people that are buying properties actively right now in Ohio for like, $25- $30,000 and then renting them out, for like a $1000 a month.
If you’re going to go with a different type of opportunity where, you’re going to offer a long-term rental, you want to get a long-term renter in there. Share on XWow! On the extreme end of the spectrum, I have a friend, who I also met through Tony Robbins Platinum Partnership, who invests in real estate and he buys hundreds of properties in bulk at a time from the banks and on average, I think, a house might be $10,000 when you buy them in bulk like that.
Yeah, for sure can be! You know, that’s a strategy I teach as well. I have a program called, Bulk REO Secrets. I have a student, his name is Verne, and he was able to lock up a thousand property package and he kind of, cherry-picked that package and kept the best ones for himself and then he sold the rest to other real estate investor and the ones that were in decent shape, he was able to list with real estate brokers in those areas and get them sold for profit as well so that was a great deal for him and you know, that’s all part of the bank REO The foreclosed properties that they’re carrying on their books that they want to get rid of pretty desperately.
You’re such a wealth of information and knowledge. This is amazing. Let’s change topics now from real estate investing to marketing because you crush it with your marketing, especially at the online marketing stuff. I just love what you do. And you know, let’s just kind of walk through some of the techniques that you use. You’re doing webinars, or have done webinars, video sequences, video sales letters, and blog launches. Can you describe some of these things and how they’ve been varying effectiveness?
Sure! So, you know that everything’s always evolving online, right? And so, we try to evolve and adapt our sales funnels and our marketing funnels to make sure that we’re kind of staying fresh and not being stale but I can tell you, back in the day, when I first launched my training and coaching company in 2009, it was just the straight-up, “Hey, I’m going to write a sales letter, a long-form sales letter, and I’m going to offer you my product and you’re going to click the button to buy it, and then I’m going to say thank you, and we’re going to call it a day, and if you know I’m really on top of my game, I might send you an e-mail newsletter maybe once a month.” That, I recognize pretty quickly wasn’t going to get me where I wanted to be at all in terms of the revenue and profitability for the training and coaching company and so, what we decided to put together was video sales letter funnels.
We would start with an opt-in and the opt-in would promise some sort of something-either a lead magnet like an e-book back in the day or, I’ll tell you what’s really working right now for lead magnets, is a lot of these little calculators and analyzers that I’m putting together pretty cheaply, offering people, “Hey, this is going to be available as a free download,”-kind of like that that price-to-rent comparison tool that I mentioned a second ago. You know, that’s a high value if somebody can download a piece of software. They can download a customized broadsheet for real estate investing just by opting into something. Chances are good that you’re going to get a pretty high opt-in rate. And then, we share with them a video sales letter. Right now, I’m kind of split-testing the old video sales letter versus the long-form written sales letter and it seems like they’re pretty neck and neck right now.
Long-form sales letters are coming back for certain markets.
There was a time a few years ago when the VSL way outperformed the long-form sales letter but now, the long-form sales letters are coming back for certain markets and my real estate market seems to be one that is appealing to right now. And then, we got more sophisticated with adding one-click upsells and crossed sells and the buyer sequences to ascend them through kind of our product ladder if you opt-in and you purchase a program that teaches you how to get deals and how to, for example, we just talked about go to a bank and negotiate a thousand property package, well, what’s the next thing you’re going to need? You’re going to need to know how to fund that package and so then, the next natural progression would be, “Hey, buy my Getting the Money program to teach you how to fund these deals using private money, investment partners, and what we call, portfolio lenders.”
Then, certainly, once they get a taste of how they can get the deals and how they can get the money then we need to build the foundational systems and processes for them to grow and scale their company and so then we ascend them to our coaching programs and some of our other high-end events and, you know, so it’s either market right to the opt-in, market right to a webinar registration, which webinars have always have performed well for us and continue to do so. You know, what we’re doing right now with something really cool that I learned from Ryan Deiss, which is the blog launch and that’s where, instead of blasting email after email during a launch like maybe a six or seven-day launch sequence for a specific product to send that traffic to your opt-in or to your video sales letter.
We were able to send them to, a really long informed and very detailed content pieces posts on our blog. And so, we’ll write like, a series of three blog posts that are all centered around promoting a certain product and then, we drive that traffic right to those blog posts and I have found out that block lunch for us at least, internally, the conversion rates are running bout neck and neck so I can send the same amount of clicks to my video sales letter funnel as I send to my blog launch funnel just straight to my blog and the end result in terms of sales and earnings-per-click is just about equal. We’ve added some things to the arsenal that are really working as we evolved with the times.
So, the blog launch that’s from Ryan Deiss. Are you part of his DM Lab or did you take some of his certification courses at digitalmarketer.com?
Right. Yeah, digitalmarketer.com. He talks about the blog launch. In one of his programs and now it’s escaping me, I have his program, The Machine, which is the email marketing and then he also talks, I think, about the blog launch just on his digital marketer blog where you know they said, “Hey, here’s another way that we’re able to make email marketing work for us,” and it’s a content strategy, basically, where it just doesn’t feel like it’s so salesy and promotional. People have been on my list for a long time and they’re the people who have been on there since the beginning of 2009. I mean, if all I did was just do promotion after promotion after promotion, it would get pretty tiresome and I think that we’d have a much higher unsubscribe rate that we have so I really do try to figure out ways that I can switch it up with content and promotions and so, to me this was just a no-brainer because it’s blending content and promotion, right?
I figure out ways to switch my email marketing with content and promotions.
So, if I decide, “Hey, this week I’m going to be promoting this program!” and then the next week, I can’t do promotion email so I have to send out content emails because I don’t want to blow up my list or have high unsubscribes. This is offering the best of both worlds because the people who are valuing it just strictly for content on the blog get, basically, a very detailed outline of exactly how that strategy works and how they could implement it on their own. The people who are clicking on the embedded links and that content to go and opt-in to watch the video sales letter and actually invest in the program are the ones that are kind of raising their hand and saying, “Look, you know I want to go deeper into this and I want your guided support to make this happen!” and so I think it works on both levels. I just know, based on the feedback that we get from our list, the e-mails-I mean, I’ve never had somebody write me a thank you email for sharing with them a straight-up promotional post to an opt-in or a video sales letter but I have gotten probably 15, 17, 18, just straight-up “Thank you for sharing that with me!” e-mails from people on my list when I have promoted the content pieces with our blog launches.
Do you drive Facebook traffic in through Facebook ads to the blog launch as well?
We do, yeah! The opt-in rates that we get from people coming through the blog links from a cold traffic are good. The sales results aren’t quite as high as they are when we market to our house list. But that’s just like anything, right? So, if I’m just going to straight-up promote to a video sales letter to a webinar, I’m obviously going to sell at a higher rate to my warm market than I am to a completely cold market so we do and once they opt-in then they get that kind of warm-up and indoctrination sequence so that they can learn more about me, they can learn more about what we do, and then we do make sales, obviously, from that and then continue to rotate them through our other offers. But yeah, works well. Works really well!
Are you doing the Facebook advertising yourself? Are you farming that out to an agency or a consultant?
I am. I’ve done it both ways I started doing it myself and then about two years ago, I hired an agency to do it for me. You know, like you and I were talking before we got on the call, I’ve made a lot of pretty significant changes in my business just in the last year or so and I had ended that agreement with the outsource company I was using for the ads in December 2014 and so all of last year and so far this year, I’ve been running the ads just myself.
Wow, you are a jack of all trades! It’s pretty amazing!
Kind of, I don’t recommend it to everybody because it can be a lot of work but at least you know until I get everything-and this is just me, I prefer to get things dialed in myself before I really kind of turn on the faucet and scale something up and so, if I’m really going to blow the doors off something I want to at least have a proof of concept and proof that this thing is going to convert and then I’ll certainly turn it over to an agency but I like to do the testing phase myself.
Yeah, that makes a lot of sense. What sort of testing tools or regimens do you use? Are you using multivariate testing platforms like Optimizely? Are you just doing a real simple A/B split test?
We do A/B split tests. I’ve been doing some stuff with heat mapping. It’s really just a question of, you know, what landing page is going to convert better for us? That’s just the real basic strategy for me so I mentioned, I’m going to send some of the traffic to the video sales letter. I’m going to send some of the traffic to the long-form sales letter. I’m going to send some of the traffic to a video sales letter where the “Buy Now” button is a static button. I’m going to send some of the traffic to a video sales letter where the “Buy Now” button pops at like, it’s a timed pop where it will pop later on. Send some of the traffic to what I refer to as, a short form sales letter, which is kind of a summary of what they get with the VSL embedded to the top and so across all of those different types of landing environments that’s where I test.
I’ll keep track of whatever the lead source is and what the sales conversions are across all of those various landing pages and then we usually send the majority of the traffic by lead source to the one that converts the best. It’s a pretty simple process, honestly. I know that there are people who probably are selling a whole heck of a lot more than I am. Someone who can really enjoy the impact of one-quarter of 1% improvement on something. Unfortunately, I’m not running that kind of volume yet so we just look based on the lead source whether it’s Facebook traffic, LinkedIn traffic, Twitter traffic, or blog traffic and what landing page format is going to work and convert the best for us then we just go with that.
I know you’re downplaying your success a little bit here but I do have to give you some kudos here for building kind of an empire. Major seven figures sort of empire. I don’t know to the degree but making that kind of money on an annual basis and being able to fill-I know you’re not doing these events now where you fill 200 or so people in a room twice a year but you were doing that and that’s impressive! That’s really pretty darn cool! And so now, you’ve switched to smaller events because you’re enjoying that more. We talked before this episode about how your business is boring and it’s your own fault so you didn’t like the large events. You didn’t like all the logistics and so forth so you switched to smaller events. How have you adjusted things to accommodate this new model?
You don’t have to be able to do math in order to be a successful investor!
Here’s the thing, I’ve been investing in real estate since 1994 so that’s 22 years. I have spent a lot of time in this business and in this industry. I’ve had my training in coaching business since 2009 so what is that? Seven years now? Eight? I should be able to do math! See? Proof that you don’t have to be able to do math in order to be a successful investor! But yeah, so I’ve been doing everything I’ve been doing for a long time and as an entrepreneur, and I think this will actually resonate with people that are listening to this, or entrepreneurs who are listening, or people who run their own businesses-we kind of get stuck in these ruts and for me, I was always so caught up in the revenue goal so each year, the goals that I would set for my business would be a revenue goal. I remember, the first year that I hit a million dollars in sales, it was a huge deal.
I was like, “Oh my God, I feel like this is what I’ve been trying to do all of my entrepreneurial life and I finally did it!” I think we did it back in 2012 when we first had a million dollars in revenue for the year and that year we actually hit that figure in July of that year. It’s pretty fast. I experienced back then like this really weird feeling of, it was kind of like, an entrepreneurial letdown. Like, my friend, Suzanne, at the time referred to it as “the million-dollar blues”-that you know, you work so hard as an entrepreneur to hit this revenue figure and to have this pinnacle that we’ve kind of set for ourselves of this million-dollar business and you do it and then you’re thinking, “Now, what do I do?” So, for my next act, am I just going to keep doing this and trying to grow to another arbitrary revenue goal? Or, am I going to do something different?
It just felt really weird to say. “Okay, next year, we’re going to do two million dollars, and the year after that, we’re going to three million dollars!” because it wasn’t meaningful to me anymore. So, for me, it was like, okay, last year, 2015, I turned 50 and I had accomplished every single goal that I’d set out to accomplish both personal and professional except for I still bite my nails and I still need to lose some weight but besides those two things, everything else I’ve crossed off the list. I’ve got a million-dollar dream house. I get to vacation wherever I want whenever I want. I’ve got a Porsche. You know, I have the life that I dreamt about back when I was on the road three weeks a month. This is what I wanted. It’s like when you have everything you’ve ever dreamed of, what do you dream of next, and what’s the next thing?
And so, I was experiencing some of this weird depression, I think, and I’m referring to it now as “my business midlife crisis” where I decided this is boring and I’m not fulfilled by it anymore and I don’t want to do it and I’m going to sell my business and maybe I’ll do something else and so I went through this really weird funk last year where I decided I just want to either sell this business and walk away from it altogether or I’m going to recommit to this business but I’m going to recommit to it and do some major changes in the way that I do things. Luckily, I chose the latter. I decided to eliminate all those things in the business that I didn’t enjoy doing anymore even though they brought a lot of revenue. I didn’t enjoy doing them and I was going to start going back to doing things that I really enjoyed in my business and one of those things, one of the flips was, as you mentioned, it’s very lucrative to hold these really big 200-people events.
You put 200 people in a hotel ballroom and you go up on stage and you train for three days and then you invite them to join a high-priced coaching program. I mean, we do like, half a million dollars in sales on a weekend but it wasn’t fun, it was super exhausting, and it just required a huge marketing effort to put that many butts in seats twice a year. I didn’t want my business to be an event business. I wanted it to be more personal. I wanted to find a way that I could make it more affordable for people and for a lot of people because honestly, where I had kind of gotten to was, I had priced myself out of the range that most new investors and certainly even a lot of beginning successful investors-I’d price myself out of their market and I really wanted to attract them so I thought, alright, I’m going to not do the big events, I’m in a focus on having smaller events. I’m going to work with the people that I really want to work with, and instead of that old-fashioned internet marketing way that they taught us back in the day of, oh, you know, don’t even have a phone.
I’ve kind of inserted myself physically and emotionally back into my business, it started to be really fun and fulfilling again.
Don’t talk to your customers and just do everything online. Last year was also about randomly picking up the phone and calling customers and interviewing them and finding out what they wanted and what would be meaningful to them and what would really help them achieve their goals and, once I’ve kind of inserted myself physically and emotionally back into my business, it started to be really fun and fulfilling again. That’s where I am right now. We’re focused on doing the smaller events. I’m focused on creating amazing content that you know is getting a lot of great feedback from visitors on our blog. We’re growing organic traffic month after month and we’re experiencing excellent, you know, I get like, 400-500 leads a month just from the blog. That’s just free organic traffic with no marketing effort whatsoever. Just from the content that we put out. I’m also enjoying bringing the sales process to a more one-on-one.
Like, let’s have a sales conversation and find out if this program is right for you versus me, standing on a stage and talking at people for three days in this whole kind of like “I’m the star”-type of environment and the people are going to join because of that star power. For me, it’s a much more real experience. It’s much more fulfilling experience. I’m not going to lie-because we ditch some of the things that weren’t fun that were very lucrative, we’ve taken a hit revenue-wise but you know, we’re obviously going to make that up pretty quickly just by following this new path and then adding to it and really delivering what it is that our customers want.
See, you have your passive income stream from the real estate investments, you have active income coming in from your coaching and small events and to do one of your smaller events, how much would that cost and for how many days? How does that work? Is it like, 10 people in the room?
Yeah, so these are centered on hot topics and we have one that we do around a specific commercial investing strategy and we cap it at ten people. I work at my home now-that was another change that I made. I closed down my office and everybody’s virtual now and I get to work from my home office so that I get to go to an office, but I have an entrepreneurial space that I belong to where I get my mail and I can go occasionally and have office space and we do the events there so I don’t have to worry about a hotel. Ten people, it’s anywhere depending on what we’re teaching, it’s anywhere from like, $3,000- $5,000 a ticket. They get to come. It’s an implementation event as opposed to a teaching course and sales event.
You are paying to come and work and I’m going to be right there with you while you’re making offers and while you’re negotiating deals and you’re going to get the benefit of actually taking the action and doing the implementation right there in the room. The one thing that I always found was missing from the big events that I did was that people would sit and listen and they take great notes and they’d think it was fantastic but then they go home and they’d be staring at this giant binder full of overwhelming information and when it came time to actually take the action, they were overwhelmed or they were just scared out of their minds and couldn’t take that first step. I didn’t see the type of outcome or success that I was hoping for from those events and so, I’m not going to continue to put forth that kind of personal, physical effort to stand up on stage and hold the energy in a room for three days and talk versus the marketing effort to put that many people in a room if the outcome isn’t going to be that great because I am about the outcome. I want the people to have the success, right?
So, with these smaller groups it’s like, look, man, this is it, and I call it forced implementation. They’ll force you to take out your phone and make this phone call and negotiate this deal and make this offer right in front of me and I’m going to be right here beside you every step of the way so that you can do this and now the results that you know we’re getting from these events and from the people we are coaching as a result of this forced implementation strategy is like, a hundred times better than what we would see from those big events. That’s part of what makes it fulfilling and exciting again for me. As the leader of this company, it’s like, I don’t want to just put out stuff and have it sit on people’s shelves like the majority of the real estate investing training does. You know, I’m guilty of it too. I have stuff that I’ve purchased that I’ve never even opened or looked at. I just buy it because you think it’s the time you want to do it and then for some reason, you don’t and you move on to something else.
The more product that you have to sell somebody, the more opportunity there is to generate revenue.
Happens to all of us but look, if you’re going to come to one of these smaller events, it’s forced implementation and accountability, and we’re going to do this. Now, those are the small events. I’ve also kind of recommitted to just kind of flooding my market with affordable, entry-level, online home study programs as well and my market will just buy all day long and twice on Sunday the little $97- $497 entry-level front-end training programs. You know, for a long time I was like, I’m going to get away from that. I’m not going to sell anything for less than $2,000 and now, I’ve kind of come full circle and realized that this is what my market wants and it’s super easy to build those funnels and automate that and obviously, the more product that you have to sell somebody, the more opportunity there is to generate revenue.
And so, how are you automating this? Are you using something like ClickFunnels, LeadPages, Infusionsoft, or Ontraport? What sort of tools?
Yes, the tools that we use are Infusionsoft and I use OptimizePress. I also have a LeadPages account and I’ll use LeadPages occasionally-I like to use LeadPages for webinar and registration pages because those go-to webinar registration pages are kind of ugly but for the most part, it’s like 95% of our stuff is built using OptimizePress and Infusionsoft and that’s how we’re able, through the Infusionsoft campaign builder, to have these kind of engagement sequences when people opt-in where we try to get them to buy the product and then if they don’t, then we have so many different opportunities to send them to-different product funnels based on feedback that they give us. They’ll opt-in to a certain front and lead funnel and if they purchase that program then they go into an ascension sequence where we try to sell them various upsells that go along with that program, to either speed up the results or automate the result. We’ll also invite them to come to a webinar to learn about our coaching program and invite them if they’re qualified to get on a call with me, we’re all make that offer to them.
We also have built-in some survey technology into our Infusionsoft so that we can kind of send people into the sequences that they’re interested in so that they can tell me what they want to buy as opposed to me kind of guessing, right? So, if you come into my instant private money funnel, for example, that’s a product that we have and it’s a $97.00 front-end product where we teach people how to locate private money lenders from the public records. If you don’t buy that product, then I’ll probably hit you with a survey through that engagement sequence that says, “Look, you haven’t purchased this thing. What is the actual problem that you’re looking to solve in your business?” and then based on that result, we have some conditional logic built in that we can send them into. Another funnel that would be more appropriate to what they want to do and so, we’re always trying to figure out like, “Look, man, what is it that we can do to make you a successful investor?” and we just kind of keep our ear to the to the feedback that we get and the requests that we get and we try to fulfill it every level.
That’s pretty badass. I mean, that’s serious automation with the upsells and the downsells so it’s really, really cool. So, you’re driving people to your small events through the webinars. Is that the best way to get people into small events? Or, are you getting people to sign up for small events just from consuming the $97.00 product and they’re like, okay, I totally want the next thing?
It’s both and it’s really interesting. I can’t say that one works any better than the other but I can say that one way will work better than the other based on certain strategies and here’s what I mean by that-so with racing private capital, for example. I have a program called, Getting the Money. It’s a $500 product. All of the traffic that goes through that funnel is generated with the webinar and so people will watch the webinar, they’ll buy the $500 product and then as part of that, ascension sequence will invite them to a small event where we’ll work with them to build that division of their business out to work with individual investment partners. If that doesn’t work, then we have an opportunity to invite them to our coaching program where that’s a primary focus of what we do in our coaching program. If they are doing it on a larger scale, I have another opportunity where I can work with them on putting together hedge funds and private equity funds so we have a funnel that works out well for that and that specific-you know, the small event that’s attached to that and, well, there are two small events attached to that plus a coaching program.
All of those sales from that funnel are driven by web and are on the front-end. I can’t get anything else to work and I’m not quite sure why but I’m not going to, whatever if it’s webinar, it’s webinar and we’ll just keep going with what works, right? But I have this other program, it’s a $197 front-end program and it’s a commercial investing strategy and I just recently launched a small event. It was $4000 for a ticket to that small event and I marketed it only to the people who had invested in the $197 product, never been to a webinar, just came from whatever lead source they came through. They opt-in, watched a video sales letter, and bought the product. I wrote a good old fashioned long-form sales letter. I sent two emails to the people who had previously purchased that program and sold out that event in about, well, less than six days at $4000 per ticket.
Actually, I accidentally oversold it. We sold 12 seats instead of 10 because somebody had saved the page before I took the link out but we still let them in. But yeah, so it really depends. It kind of goes back to what you asked me before about like, the split testing that I do. It’s all, usually, just based on the lead source and what landing page is going to work best for the specific product. Now if I go market that small event again and send the traffic to that long-form written sales letter and it doesn’t convert the way I wanted to convert, well, then I’ll test a webinar right because I know that the webinar works in my other product funnels but until something doesn’t work, I’m not going to spend a whole lot of time trying to figure out another way to make it work. Does that make sense?
Yeah, totally. Now, are you doing a lot of four video sequences to promote whether it’s an event or a product? I just did a launch or I’m in the process of doing a launch for Passions Into Profits with Kris Jones and we put together a four-video sequence and that is a free “boot camp”, and then they get to paid eight week-course if they ascend after watching those four videos. It’s not dissimilar from what Michael Port did with HeroicPublicSpeaking.com and getting people to watch a four video sequence and on Todd Herman’s The 90-Day Year. This is a pretty tried and true formula. Are you employing this as well or have you in the past and decided it didn’t work as well as webinars or something else?
Yeah. You know that kind of goes back to the old fashioned product launch formula, right? I have tried that in my business. You know, it’s one of those things that I’m going to chalk up to: It worked really well until it didn’t. For me, right? I know that formula is still crushing out for a lot of people out there in a lot of various markets. For me, I found that it just isn’t as effective anymore. I’m not quite sure why it is. I think that, at least some of the feedback that I got from my people was, look, we don’t want to have to sit through these long videos because we don’t have that kind of time for this. We just want to know what it is that you have to offer, how it can help us, and then just give us the link so that we can buy it. Yeah, just take my money and so it’s like, look, who am I to delay the buying process for you? You have to kind of look at your own demographics and I did a really detailed study on my demographics off my list and the psychographics and who they are and what makes them tick and so, I think that that’s the reason why a lot of things that you find that work for other people don’t necessarily work across all markets.
With my people, it’s 75% male and 25% female. My whole audience skews older so these are the age buckets. They’re the most productive for us and the majority are between 45-60 years old so these are people who don’t want to sit on a computer and watch a video. They want to read something. They’re used to reading something. These are the old guys who are used to reading the newspapers. I think that’s why I’m finding that my long-form written sales letters now are either equal to or outperforming the video sales letters across all my funnels because this is just what they like to do and I think that it’s reinforced by the fact that they’re sending me thank you notes for blog posts. They love reading so it’s like the video-based sale sequence. You know, that watch four videos and then I’ll have the sales video, and then the opportunity to buy, and then I’ll close it, and then I’ll reopen it, and then we’ll have maybe a live cast or some like that. It’s just too drawn out. It delays the buying process and the feedback that I get from my people is that, they just kind of lose patience with it.
Yeah. Well, I guess the bottom line here is, understand your market.
Understand your market. You have to know your audience and that’s, again, one of the big lessons that I’ve learned over the course of the last year or so. When I try to look at my promotional calendar or my product launch calendar and figure out what product am I going to release, or what am I going to work on, or what’s the blog post going to be about, I mean there are lots of things that interest me still about real estate but when I actually did that thing where I wanted to get back in touch with my list and my people and I would pick up the phone and call people, once we got over the initial shock and they thought they’re being pranked.
It’s like, Justin Timberlake picking up the phone and calling you-
Exactly. It gives me, definitely, an inflated ego but once we got past the first five minutes of, “Yes, it’s really me. Now, can I please ask you some questions?” I got really useful feedback and it was like, look, what I want to talk about and what they want to learn were so far apart, it wasn’t even funny and when I finally just started giving them what they asked for in the format that they ask for and that they vote for using their wallets then that’s when things really started to take off for us again.
I’ve just recently surveyed my list. I sent an email out about a couple weeks ago and I offered a free electronic copy of one of my books because I’ve got three books now with O’Reilly. That’s a pretty good deal to get a free electronic book and some of these books are like, $50. The Art of SEO is $50 retail. Social ECommerce is $40. So, they get to pick one of these for free just by filling out this 10-question survey. I wanted to find out what were their hot buttons and are they more in the consulting area? Are they more retailers? Or, they’re business to business? I was asking all these questions and got a pretty decent response. It was in the double-digit percentages but it wasn’t huge. It wasn’t like, 50%. I was happy with it but what you’re talking about of picking up the phone and calling people kind of scares me-it feels weird when you don’t text somebody in advance and say, “Hey, if you’re free for a call.” I know back in the day-I’m not a spring chicken, I’m 45 years old, but it used to be, you just pick up the phone and you call somebody but now it feels weird unless you’ve texted in advance. I don’t know, maybe it’s just me and I just need to get over that.
Well, let me tell you something. I felt the same way that you did and that’s why I kind of made reference to the old internet marketing style that we were taught, right? You know, just hide behind your computer. Don’t even put a phone number on your website because the last thing you want to do is talk to somebody and I really bought into that. You know, everything went to voicemail. We have a support desk, you don’t call, you have to write out and I don’t like that kind of stuff. My mindset was really changed about that when I started picking up the phone and calling people. People are happy to hear from you. I think if you decided to go that route and-you may or may not, but if you decided to go that route, I think you’d have the same experience.
People, once they got over the initial shock that it’s, “Oh my God! Stephan? Stephan Spencer? Is it really you? THE Stephan Spencer?” You know, it’s like, “Yeah, yeah. It’s me! It’s really me!” then you can have some really productive and really great conversations with people. You know, just the information that I get is going to be a lot more detailed and a lot more in-depth than, “Hey, click here to fill out a survey to get something free.” I tell you, kind of right along the same lines, when I decided that I needed to find a way to make the high-ticket sale work because I wasn’t doing those big events anymore and that’s how I was selling the big-ticket coaching programs was from the stage. I wasn’t going to do those big events anymore. I had to figure out how I’m going to sell coaching now and it was a one-on-one sales conversation that I had to master and I sucked at it.
And so, reaching out and having just initial conversations with people helped me get over my fear and my mindset issue of people are going to be disturbed, or they’re going to get mad at me, or they’re not going to want to talk to me, or whatever. Now, I’ll pick up the phone and call and pick somebody’s brain about a topic, or what do you think about this, or if I had this kind of program would you be interested in, or what would you do if you were doing it, or what would you want to see as part of it if I had it. Heck. Sometimes I’ll just turn those outbound cold calls into the sales calls too because people will be like, “Gee, how can I get plugged in and do more with you?” Well, let’s talk about my coaching program and see if you’re a good fit. Sometimes those outbound-again, using air quotes you can’t see-cold calls, which are really warm calls because they know who you are and they know what you’re about, can turn into a $7,000-$10,000 sale so once I made a few of those, it was like, “Oh, I don’t have a problem picking up the phone and talking to people anymore!”
Yeah, okay, you’re convincing me. I put a lot of time and effort into creating the survey though.
Well, use it. You know, I’m not saying completely-
Well, no, I did use it. I did use it.
You know, it’s fine to have both. I certainly have both. I talked about the surveys that we have embedded in our funnel just to help us know directionally where to send people. But yeah, I mean I just think that we have to do something that’s going to differentiate ourselves from the competition and I think, as online marketing evolves and online marketers get smarter and smarter, we have to figure out how to kind of maintain our position in a very crowded and competitive marketplace. If I can create a personal bond with a certain segment of people on my list who are going to give me really great information, and all it takes is a couple of hours of my time each week, then that’s time that in my opinion, is really well-spent.
We definitely need to wrap up the episode here but just for my listeners, what I used as my survey system is, Survey Monkey and then I tied that into my Infusionsoft using as a peer connector because Infusionsoft and Survey Monkey don’t natively talk to each other so I needed a middleware connector and so, I used as a Zapier for that. I think you, Susan, your survey is purely inside of Infusionsoft, correct?
Yes, that is correct. We have certain things set up because we use Zapier too. We use Zaps for certain things but mostly, for adding people to automatically having people to webinars and stuff like. But yeah, we were able to configure it all internally like with action sets and campaign builder in Infusionsoft.
Yeah. We just didn’t like the look of it. It was kind of clunky.
Hey, no bones about it, it’s not good looking! But yeah, again-
So, that’s why I went with Survey Monkey. All right, cool. Well, this has been fabulous. I just so greatly appreciate you taking all this time to share your experience, knowledge, expertise in real estate investing and marketing, in particular, online marketing. Yeah, this has just been amazing so thank you again! How would somebody who’s listening and wants to sign up for coaching, or a small event, or for an information product, where would they go?
Over to the blog. That’s where you can find everything out. So, you head over to TheInvestorInsights.com.
Listeners, you can go to the show’s website for that but the Investor Insights is TheInvestorInsights.com. Cool! Well, again, thank you, and thanks, listeners-will catch you on the next episode! I’m your host, Stephan Spencer. Have a great day!
