Good Money versus Bad Money

In this episode EarlToms discusses whether you are spending money in a way that will create income or simply spending money for the sake of spending money. 

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https://earltoms.com/earltoms_blog/episode-36-good-money-versus-bad-money/

Transcript

0:00  
Welcome to another edition of EarlToms podcast. Today we're kind of going to go over some positive things about what's going on, give you some some insight on ways that you can get your deals right now that that others are not doing. And cover some some things that I like to refer to as good money versus bad money. 

0:32  
If you look at it, in your in the way of how you control your personal life, your business life is essentially the same. So what I'm what I'm seeing right now are a lot of people having an issue with skip tracing, mailers, those kinds of things. And it's not really anything that you're doing wrong. I'll be honest with you, I sent out a mailer and I staggered it over seven weeks, just for the sheer number of volume that I sent out. And I actually got zero phone calls from that mailer. Because I think right now, and I don't have any real data to support it, other than not receiving any phone calls, that the people right now have just sort of hunker down to see how everything plays out. You know, we had some, some data come out yesterday, as far as the economy goes, and it seems now that every single month that the data comes out that the inflation is reaching a record the highest only record or whatever is going on. So where the price of lumber the futures had decreased a little bit. But they're they're basically saying that the the inventories were expected to go up when actuality the inventories went down. And they're saying that, you know, the supply chain bottleneck is getting better if inventories Get up. But the CounterPoint on that, and what I'm saying is that people are just not buying anymore, because whether it be you go to Home Depot, or you go to your to your grocery store, you're going to your grocery store less often. And you're buying less when you look at your buggy when you go out simply because of the cost of things I was in the grocery store over the weekend, and you know, there was an elderly lady standing right there at the meat section. And she was she just kept shaking her head. So I, you know, just kind of laughed with her and said, You know, this is this is kind of getting out of hand and she legitimately walked off because she said she can't afford any of it. Because I think a lot of your your elderly, you know, they're on fixed incomes, and they they really have to watch what they spend. But, you know, it's it's one of those things that before it gets better, it has to get worse. So what I've started to do, and I've and I've got an order in because I've never actually put out what they call is a bandit sign. But there is one place where I know for sure that people will have motivation to sell their house that are they could potentially be on a skip trace list, or mailing list or something like that. But I know, if you show up to the unemployment office, then things are not as good as they should be. So what I plan on doing is putting a couple of signs around the local unemployment offices where I live, because I know as I just said, if you go to an unemployment office, you're not employed. So unless you get you know enough money to be able to keep your bills paid and can hang on, then you're potentially going to have some motivation to sell your house to avoid getting foreclosed on or lose it in some way.

4:49  
So that's what I'm just gonna I'm gonna test that because that's something that no one else is doing. But it's it's a it's the one place right now that I can put my finger on Say, I know people that are showing up there could potentially be motivated to sale. So while you're going and you know, everyone else is skip tracing, spending money on that, sending out these, these postcards or letters, not really getting a response. I'm not sending out any more postcards. And I already don't skip trace, because every time you skip trace, you get a phone, you people answer the phone saying, you know, you're about 1,000 person, this, this called me, I'm not selling my house, take me off your list. And that's, that's just the ones that that you actually get a good number. Because a lot of this is not a good number. And what most of you don't realize when you skip trace, whether you use the Mojo dollar, or you're using your phone, by the time you call all these numbers, your phone number has been marked as spam. And if you think I'm kidding, use your phone call someone that you know on their cell phone and see if see if on their phone, that your number doesn't register as a telemarketer. Spam call this amount. So, you know, I'm not gonna answer that call. I don't I mean, it could be someone legitimately colon colon me. But if their number has been marked, you know, spam or telemarketer I'm not gonna answer. So in a lot of ways, that's bad money that that you would be spending, if you are skip tracing right now, because people are, they're nervous, they already know that, you know, they're, they're a little bit behind in their bills. So you're calling them is only amplifying their anger. I wouldn't recommend it because you're wasting money at the end of the day, because by the time you sit there and you call people, you know, use, you may spend $1,000. But right now, you know that $1,000 is gonna turn you into a lead. So right right now is a time where you need to be a little bit more creative. And how you get your, your deals, there's, once you get your deals now, I don't know if you keep up on current events or the twittersphere. But there's there's a lot of outrage right now with Blackstone, basically saying that they're going through these markets, and paying 20 to 50%. More for properties than anyone else is willing to because they're just basically warehousing houses and taking the risk. But one thing about Blackstone is unless they have a good relationship with you that you've developed over the years, they won't actually buy from a wholesaler that they only use agents. While that is I'm not very sure. But if you're in a market where Blackstone or BlackRock is, then go ahead and get an agent to list that if you get the if you get a deal under your belt to, again, fish them out. Because they'll wind up turning it into a bidding war and over bid on it, and you'll just wind up making more money. You know, you might have to double close it. Because they won't let you do an assignment fee on it. But that could potentially, you know, lead you to more money if you do it that way. 

8:36  
But the way that things are right now, I'm not gonna tell you to be in a holding pattern. But there's just there's a limited supply out there. There's a nervous energy in the in the world right now people don't know necessarily what's coming. Even the builders index, the housing index that came out yesterday, still lowest than it's been since pre pandemic. So there's, there's just not a lot of confidence. builders are not taking on projects, contractors are not taken on projects, unless they can put a acceleration clause in it, an escalating clause in it because of the cost of materials. So if they wind up coming out there and giving you an estimate of $30,000 to renovate a house, they've got to have an escalation clause in there just in case the price of their materials goes up so that they don't want to lose money on it. It's just whenever you're having to deal with so many uncertainties, it's going to be difficult to be able to get to get your deals. So that's one reason I'm going to go for the first time you know, and get some signs and put them in front of the unemployment offices. But one thing that I've noticed is everyone still complaining about direct mail and skip trace, those kind of things. When a majority of people are doing something, it's not going to give you the maximum return. And I know there's there's a, it just seems like the easy way to do something. But it's one of those kind of opposite. If it was easy, everybody would be doing it. That's why it is easy. So everybody is doing it. So you have to sit there and think to yourself, by the time you call this person or send this person a postcard right now, how many are they actually getting in the mail? What is going to separate you from everyone else that has either coders or symptom mail for you to get that deal? Now you might get lucky. And everyone else, you know, send them a postcard two weeks a month earlier, and they weren't to the point where they were ready to sell or had to sell. And yours might show up at that exact moment. But that's gonna be a rare scenario. 

11:07  
So one thing that I've that I've seen, and I just went through a couple of Facebook groups to to check on this. And while I was scrolling through, what I want up seeing is, you know, a lot of people asking about title insurance, a lot of people asking whether they should cloud title, a lot of people ask him on postcards, and skip tracing is not working, why the information they're getting for the postcards and skip tracing is not working. I've had episodes on that to explain why that doesn't, you know, lead to good results. The only reason that you do those kind of things is to keep the market saturated to keep yourself in front of everybody. But the one thing that I saw in all of these groups, that is an untapped market is something that is SEO. No one does it. I don't know why. But no one does that I do it, I spend money every month. So my phone rings, because people get online, and they go they go search. So what winds up happening is, is I'm not having an angry phone conversation with someone, because I sent him a postcard now was the 10th person that month that sent him a postcard, or I tried to call them while they were in the middle of eating dinner. And I was the 10th person from that day that they had called and, you know, tried to buy their property, and I just get tired of it. So when you look at the reasons now, I still do get you know, angry phone calls from sending out postcards because it's, you know, it's it's just the way things are I mean, I got one the other day, the guy has for months refused to give me his address, so I could get him off the list. But every time he calls me, it's I'm a white devil, I'm a cracker. I'm this and I'm that and I'm just like, Sir, give me your your address, and I will get you off this list. It's almost like he enjoys calling and, you know, saying these things to people. But I can't control that. So I got a number, the mailbox number out of it. I didn't get the full address. So what I did is I just went and took every single mailbox number that might stay out of my list. Because I'm just tired of hearing from this guy. I mean, I'm not gonna feed his anger, just so he can pick up the phone and call me and yell at me and call me names and things like that. It's just not worth it for me to go through that Monday. But the SEO part of it will help you get better leads because when someone either opts into your website or picks up the phone and calls you without you contacting them, that means they're ready to do something, they have taken an action, instead of kicking tires, they have taken an action and they are ready to do something. So you're past the initial problem. Overcoming it. 

14:30  
When you're looking for a lead, the only thing that you have to do once they call you is put their mind at ease and overcome, say a price condition or something like that. But when they call you, they're basically giving you an invitation to come look, look at their house and make them an offer. It just turns into whether or not you can actually close that deal. Right now it's a little bit difficult. Because like I said, the prices people are still asking are just not in touch with reality, because they're, they their houses need renovations. And they don't realize that, you know, plywood is still $75 a sheet, and you're having a hard time getting, getting lumber, I mean, I just went and bought a refrigerator in the stove. And I usually spend $1,000, you know, total little above $1,000 total for one of my rental houses to do this, by not spending $10,000 I mean, $2,000, because I could only find only one place, had a matching brand, color, refrigerator and stove. So I had to basically take it because everyone else was saying, Let me check my system, then it would be one that I liked. And then next thing, you know, they would say, we can't get this because they're not they're not manufacturing it right now. And that's what a lot of a lot of companies are doing now until they get the order. They're not gonna manufacture it. So until they get to demand, they're not opening up that line in their facility to be able to, you know, to make that that product. But it's an issue. 

16:25  
So I would actually sit there and say, look more towards the SEO part. Now, because it's going to take a couple of months, depending on who you hire, to get you in the rankings, where you should be for the the keywords that will actually convert. One thing that a lot of people make a mistake about is their will they'll sit there and they'll say, Okay, well, I've got to be ranked for we bought houses. So one of the hardest keywords to rank for. And while you rank for that key word. Are people actually going to take an action on that keyword? The SEO has to do some analysis to figure out what is going to convert a lot of people kind of put the the pay per click Google ads in the same category as SEO. It is. But it isn't. Because one thing about the SEO that's different than the Google ads, is it you're waiting on someone to come and visit your site or call you. That is a fixed amount that you're, you know spending every month, regardless of how many leads that you get, where the Google ads are going to charge you for every time someone clicks it. And your competition could be out there and clicking you know on your ads. But whatever the key word is, and this is where a lot of people make a mistake on their on their websites. Let's say that you have we buy houses in Dallas. That's your key word. So when some and it doesn't matter if it's like I said the Google ads are just an SEO organic result. When someone clicks on we buy houses in Dallas. When they go to your website, does it match what they searched? So when they let's say that they like I said they search for we buy houses in Dallas. So when they go to your website, does it does the page that is taken them to say we buy houses in Dallas, Fort Worth Arlington farmers branch Denton, what does it give, hey, we buy in Dallas and surrounding areas and make you look like you actually know what you're doing? Or doesn't go to the to the page that says We Buy Houses doesn't give any mention of anything.

19:18  
So they go Okay, well, this is not necessarily what I was looking for. So they leave your website. One what my SEO company does, and it's going to be different in your market. Because it's based on what like I said the conversions? Well my SEO company focuses on cash homebuyers, or cash home buyers with an S so what that winds up doing in my market is that actually gives me the conversions. Because when people are searching, they're looking for somebody to buy their house, but what it's doing on the back end In my market, and like I said, it's gonna be different for every market. But in my market, it's a back door, kind of a synonym is related to we buy houses or sell my house fast those kind of things. So when you you have like a mine, I have a location page dedicated for every single city in my market. So like I said, let's say that is Denton, my search term and my page is going to be cash buyer cash homebuyers in Denton. So when they go to my page, my page is gonna say cash homebuyers in Denton, it's not gonna say cash homebuyers without a, you know, location on it. It's not gonna say cash homebuyers, Dallas, it's going to specifically say, the area that they're looking for. And then what it wants up doing is, you know, the We Buy Houses, or the you know, sell my house fast or whatever another keyword that, you know, would rank in your, in your area would be as doing a back door? Because that's one thing that Google pays attention to is how many times does someone take an action on your website, because I look at it as though it's relevant. And action to Google means it's relevant. So if you're sitting there, like I said, you just got We Buy Houses out there and no one's taking action, Google's not going to help you out because it makes them look bad. You don't have to do the pay per click, if you do your website, right, and you do your SEO, right. Now you can go and get these services, you know, from anywhere from a couple $100 to a couple $1,000, you're going to get what you pay for. I'm just telling you that up front, you sit there, I mean, I get probably five emails a day, from people that are just typing on the internet, top PageRank, you know, hey, we did a scan of your of your website, we rank you Tim word 10 keyword, blah, blah, blah. I don't have any any interest in that whatsoever. So I believe everyone that comes in, but the only way that they're able to do that is because if they're following me on the first page of Google, because they're not sitting there searching for people, on page three, page four, to send that out. They're looking for people that are already ranked. And I don't know why that is. Because if you're already ranked, obviously, the company that you're working with is doing a good job. So why would you change. But if you're willing to going forward to find leads that no one else has, the SEO is something that you need to make an investment in. And when you know, if you want to take you a couple of times, put them across the street from the unemployment office, and you might get lucky, I'm not gonna tell you that's gonna give you leads, because I'm fixing to try I don't have any results on that whatsoever. The sod is not even out yet. So I can't tell you if that's gonna work or not, it's just an idea, and a hunch that I have, because I'm trying to separate myself from other people right now and get and get leads for farming so I can buy. 

23:26  
But the SEO part of it is going to be the biggest key for you because I can remember back in the foreclosure crisis, you know, when wholesaling was kind of just getting started, it was becoming trendy, you started seeing bandit signs everywhere. And, you know, people still didn't trust bandit signs, so to speak. So they weren't calling him. But I can remember during the foreclosure crisis, on average, my website would wind up taking anywhere between three and five leads a day, every single day. Because once people get desperate, they go hunting. They actually they can't afford to sit back and wait on you to find bill, they have to come find you. Because they're in a timeframe now. So that's why I'm saying right now, put some actual good money into your SEO, your deals may fall down a little for the next couple months or maybe even six who knows. And I'm not telling you to stop doing your your other avenues of marketing. You know, the postcards, skip trace, whether you do Facebook ads, whatnot. I'm not telling you to stop that, but figure out a way to get the money available to put it in the SEO because as the market turns You're gonna have people hunting you, because they don't have any other option to turn to. Because what what what ends up happening is when our market turns, a lot of these wholesalers discipline out there and just throwing money at it, to see if it'll work, and they're not getting any deals, or their deals kind of slow down, then they run out of money, they can't market, and who's sitting there waiting to pick up all those pieces. You know, I've always, I've always been an advocate of SEO, it changes all the time, it's hard to keep up with it. But it's something that is almost a necessity, I wouldn't say almost it is a necessity, because I'm getting leads that no one else is getting. Because when somebody is hunting, they may not be on the list. But they're hunting, they're gonna find me, they're not going to find you, because you're not where they can find that's going to be a problem for you going forward in this market. Because you're gonna have a lot of people that are gonna get kind of attacked from everybody, because once it shows that you hadn't paid their taxes, and they haven't done this or done that, they're just going to get overwhelmed, they're going to have everybody come out there, make them an offer, they're going to take the highest one. And you know, as well as I do, the person going out there offering them the most money is the person, they cannot close that deal. So you just wasted your time going out there making them an offer, because by the time that deal falls through, do they still have your offer? Do they still have your contact information, they just had five people out there making them an offer. And right now they've got enough going on in their life to where they're not paying them really attention to the backup offers, they're not holding on to them. So they put all their hope in this person that says I'm gonna give you the most money. And I was okay and close it. And then I'm back at square one. So when they go back to square one, instead of doing the same thing again, and calling people over, they're going to go hunt. And the place people hunt now is online, in the in the search engine, on Google, DuckDuckgo, Bing, you have to be able to be found in the market is coming. So instead of spending the bad money right now, start looking at other ways because the market is going to change, to spend good money that is going to pay off for the market that we're about to be in. Instead of keeping the same process that everybody's doing this just not working right now. If it's not working, you always have to change it. If it works, stay with it until you until it stops working. 

27:57  
But right now, I think everybody can can agree. The ways of doing things have changed. So if you don't change them, you're going to get left behind. I apologize for missing last week's episode a lot going on. Speaking of bad money, I've spent probably $10,000 in the last two weeks on repairing rental houses. It seems that many of my air conditioning units have decided to need some repairs, with a couple of them needing to be replaced. So that's bad money. Now Actually, that's good money, but it is money that is painful to spend. Just kind of out of nowhere. 

28:45  
I hope you've enjoyed this episode, try to put your mentality to figure out what's going to be good money versus bad money, it's all a risk, but make an educated guess on it. Look at data, do exactly the opposite of what everyone else is doing. So that you can separate yourself from the other people and get the leads that are actually going to pay your bills instead of the leads that everybody else is is fighting over. So that you can actually make some money. 

28:45  
With that we're gonna draw to a close but we'll be back in a couple of weeks with a new episode. 

29:25  
Thanks for listening.