Episode 39: [Marketing] How to Determine Your Target Farm Area w/Lamar Cannon

Danny Johnson / 12 comments

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Show Notes

Lamar Cannon is a real estate investor who loves to travel the world. He set up his business to allow him to do deals no matter where he is on the globe. His strengths are strategy, marketing and a strong mentality. He enjoys experiencing new cultures, trying new foods, reading, writing poetry and playing basketball.

In today’s episode Lamar and I talk about how he goes about determining which part of a city to focus his marketing on. He’s been investing in a lot of different cities outside of his home city of Austin, TX.

Investing in other cities forced him to develop a data-driven system to determine where to focus his marketing.

As a wholesaler (but almost equally as important for rehabbers), he wanted to determine which zip codes have the most action.

What he does is goes to ListSource.com and generates a list based on the following criteria:

1. Entire City (and surround areas)
2. Single-Family Houses Only
3. Last Sale Date within last 6 months
4. 99-100% Equity (shows most likely was cash buyer)
5. Absentee Owners (most likely investors bought)
6. Companies Only (filter to filter down further to make sure getting investor buys)

This is how he gets the data he wants for free…

On the last page right before checkout, you can preview your data and filter it by zip code. All he’s really interested in is the count of the matching transactions so just the record count per zip code will tell him which zip codes have the most investor transactions.

How cool is that?

Another filter he uses from time to time to determine great areas for wholesaling is the foreclosure rate for the zip codes. The more foreclosures, the more likely it is that the area isn’t being served well by investors as the houses aren’t being bought before foreclosures are happening…LESS COMPETITION!

For someone like myself that does mostly rehabs, I wouldn’t focus as much on foreclosures, rather I’d include price ranges that are near the city’s media home value as that will be the where the biggest pool of buyers is.

All in all, we shared a lot of great info in this episode to help you determine where to focus your mailing and claim your target farm area.

Links

ListSource.com

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Episode Transcription

Danny Johnson: This is the Flipping Junkie podcast episode 39. [music] Welcome to the Flipping Junkie podcast. My name is Danny Johnson; former software developer turned house flipper, flipping hundreds of houses. Each week, we bring you interviews, strategies, stories, and motivation to help you get started flipping houses and on your way to becoming your own boss and achieving financial freedom. Thanks for spending time with me today. Now, let’s get to it.

Hi, welcome back. Thanks for listening to the Flipping Junkie podcast. Really appreciate it. Today we’re going to be talking about how to determine your target farm area. Some people just assume that the entire city where they’re going to be investing will be their farm area, but I think people ought to focus a little bit more and be a little bit more targeted and expand once you get your brand sort of recognized and start to do a lot in a certain area. So we’re going to be talking about with Lamar Cannon out of Austin. A great guy. He’s a real estate investor who loves to travel the world. He set up his own business to allow him to do deals no matter where he is. His strengths are strategy, marketing and a strong mentality. He enjoys experiencing new cultures, trying new foods, reading, writing poetry and playing basketball. So Lamar is going to be on the show talking about how he determines where to target within cities and maybe even which cities to target when he’s looking at flipping houses as he does so remotely, which will give you a good idea if you’re going to start out locally, you know, help you figure out where to start out and where’s the best place. Obviously, it’s not going to be a high-end neighborhood, upscale neighborhood for most people as investors because that’s a lot harder to get into financially and the risk is a lot higher with each property. So, we’ll be talking about all the pros and cons of the different areas and parts of town where you should be looking to invest in this episode. [music]

All right. Hey, Lamar, are you on?

Lamar Cannon: Yeah, I’m here. Thanks for having me. This is awesome.

Danny Johnson: Yeah, no problem. Thanks for being on the show. Appreciate it. I wanted to talk with the audience about how to determine target farm areas for people. To get started though, let’s talk a little bit about you. Let’s find out what your background is, how you got started, why you got into real estate, all that good stuff.

Lamar Cannon: All right. Well, we could start a little further back and we’ll talk about like how I think and stuff like that. But growing up, I have two brothers and one little sister and growing up, we always had different chores we had to do. My dad had his construction business so we always worked with him in his construction business. Whenever we had to do our chores, I would always figure out like what I can give my brothers so that they’ll do my chores for me so that I can go outside and play basketball. I would give them the little bit of money that I could scrounge up. I would give them basketball cards; those were pretty big back then. Or I would give them something cool that I had that they didn’t that they wanted. So I guess I was outsourcing at an early age and it was kind of cool. But as I got older, I didn’t really want to go on to real estate because growing up and working in construction and doing manual labor, it wasn’t really something that I wanted to do and then I noticed that the wealthiest people in the world, they’re not doing the hardest work in terms of like manual labor. So I started looking into that and I decided that I wanted to become an entrepreneur.

The other thing that helped me want to become an entrepreneur is when I was going into college. I was in high school and I was looking up – I think I was doing a search on the internet for six-figure jobs. So I’m doing a search and every job that I pulled up, you have to have like 10 years’ experience. So I didn’t want to go to college for four years and then graduate and then work 10 years and then eventually maybe start making the lower six figures. I was thinking that there has to be another way to do it and so I just decided that being an entrepreneur will be the best route. So I went to college, I played basketball in college and then after college, I started working at an IT company. After a while I became the vice-president of operations there but it was still like a job so I was still working for someone. So I decided to leave that position after like 3 or 4 years and then I started a marketing company, and that was pretty cool but that was like my first experience in being self-employed. Basically what I did is I created like a pretty good paying job for myself where I’m working 60 hours a week and I have 15-20 people that I’m managing and hiring new people every week and stuff like that. So that wasn’t really my style. I was about to open a new office in Houston and then at that same time, I ended up doing a couple of real estate deals and I realized that with real estate I can work much less time and I can make quite a bit more money. So I went into real estate and started doing that. Now here I am today and I use my real estate business as a way to make money as well as be able to travel around the world with my friends and hang out and still make money and do deals while we’re out of the country.

Danny Johnson: Awesome. That’s I think a big reason why a lot of people get into the business because of the freedom that affords you. What did you start with? What kind of investing did you start with? Were you wholesaling from the get-go? Did you start with rehabs?

Lamar Cannon: I started out wholesaling and I’ve never done a rehab in my whole life. The only thing I’ve done is wholesaling and rentals and new development, so I haven’t done any rehabs. I guess in my mind I just think that rehabs, I don’t have the system set up to do it the correct way, to make it fit my style. I don’t want to be in Thailand worrying about if the painters are doing what they’re supposed to do or if the people are putting up the sheet rack and stuff like that. So a lot of times we get those opportunities but we just pass them on to other investors that can capitalize on it a little bit better than us.

Danny Johnson: Yeah, no problem. So you want to go and get started then with where to find? How do you pick? Since you invest in several different cities, what’s sort of your criteria for finding which cities you want to invest in?

Lamar Cannon: My first criteria is – and it could be different, people can have their own style – but with me, I always like investing in the most competitive, hottest areas of a city. So when we started out in Austin a while back, we got some couple deals on the outskirts of town and they’re pretty good deals but it took a while to get rid of them, to sell them so we just decided that we’re going to just invest in the hottest places with the most action. We picked about 10 zip codes and we focused on those. Every time we got a property, I sold it within a day or two, if not that first hour. So that’s the kind of style that I like because the faster your property sells, the less you have to worry about and the less time you have to spend on it, calling people, texting people, sending out emails and then answering all those calls.

So the first thing we do is we always run data. First, we’re just making decisions based on opinion and what we think and what other people we know are doing. But after a while I realized that that’s not a scalable way to do business so if I want to be able to be like the eBay of buying houses then I can’t make decisions based on opinion. I have to have some kind of data to back up that decision and go from there. So we started pulling data based on where investors are buying properties and the volume of where they’re buying. So if someone’s buying in one zip code, if the investors are buying let’s say in the last six months there’s 50 cash sales in that area where investors bought the houses, and then there’s another zip code where there’s only two cash sales. I’m probably going to lean more towards the zip code with the 50 cash sales because I know that from the numbers it shows that more people are wanting to invest in those areas. So that’s the main thing that we started doing and we were getting that information from MLS and then we found out that you can get the information off of List Source. We have a pretty cool process that we use now that we can pull that data because the first time, we have this pretty complex numbers that we pull and the first time we did it, it took 500 hours of human work to get it done. I had some VAs in the Philippines do it for me. So it took about 500 hours and then the problem is it took a long time. So 500 hours, it takes a while to get all those hours complete and the data is something that we need immediately. With us, we need that data quickly so I had to figure out a faster way to do it and a less expensive way to do it and so we ended up finding out a way to get the whole thing done and about an hour because it’s mostly automated now, and then so we can get airflow, run the numbers then we can find the places that we want to invest in.

Danny Johnson: So that’s strictly determining what parts of town has the most transactions for investors, right?

Lamar Cannon: Correct.

Danny Johnson: So do you want to explain what kind of data you’re pulling and what you’re looking for and what the end result that it spits out like exactly it spits out a ranking of zip codes with the most active, sorted by most active to least active or something like that?

Lamar Cannon: Yeah, that’s exactly it. So basically, what we do with List Source, we play around with the data. Basically we sort it by – I’m going to do it off from memory since I don’t have it up in front of me. But basically we pick our geography. We’ll usually start with MSA. We’ll start with let’s say if we’re doing Detroit, we’ll start with the Detroit MSA and so that’s basically Detroit and all the surrounding cities that make up the Detroit metropolitan statistical area. So we’ll pull all that information or we’ll put that into List Source and then we’ll go to a property type and then we’ll do houses only. Then from there, we will do houses that the last sell was within the last six months and then we’ll do houses that have 99% to 100% equity, so that means most likely the house was bought with cash. Then we’ll go to the sort where it’s absentee owners only. Basically, what we’re doing is we’re finding the absentee owners that bought a house for cash that are in the inside of the metropolitan area that we’re looking at within the last 6 months. Then we’ll also pick a sort where I can do companies only. So individuals buy houses with cash sometimes, maybe for their personal residence but usually most of the time when a company is buying a house with cash, an LLC or a corporation, they’re buying a house with cash, usually that’s because it’s some kind of investment that they’re doing with the house. So once we do that, then we pull that list and we don’t actually buy the list, we just go into – there’s a part on the last page where you’re about to buy the information and you can do a preview of the data, you can select the certain leads that you want to buy and then you can sort them by zip code so it will email you the number of houses that meet that criteria in every single zip code in that area that you choose. Then from there we can just rank those zip codes and in that way we know that –

Danny Johnson: That’s a great tip.

Lamar Cannon: Yeah. Then so in that area we know all the zip codes and based on which ones have the most action. Let’s say I have a limited budget or if I want to only do like the hottest places in the whole United States, then I can just sort if that way and then I can make sure my budget is going to areas where as soon as I get a property that make sense, I’m going to be able to sell it instantly. So that’s what we like, is we like just getting rid of things really quickly and so if we’re able to do that, then it works. I guess there’s some other strategies that people can use and different things, but this is the one that I found that every decision we make is a decision that lets us have the most stress-free type of business with the most time freedom. So that’s the way we do it.

Danny Johnson: Great. So one out of that required 500 man hours before in the past.

Lamar Cannon: Well, so that is probably one of the most important parts of it. So if I was just starting up right now, that’s probably the only data that I would consider. But the 500 hours was analyzing the entire United States and pulling all that data. So a lot of times when you’re pulling this much data, you’re waiting quite a bit because you’re waiting for the system to update all the numbers because there’s millions of houses in the United States and you got to narrow that criteria down to exactly what you want. Then the other thing is the cash sales is one column which I think is probably the most important column. But then we have about 8 more columns of data that we use to kind of rank each zip code or each city depending on how we’re doing the investments. Then that tells us which markets are better for whatever strategy that we’re going to do. So if we’re looking at wholesale deals, then we’re looking at areas that have high number of foreclosures or high number of something that indicates there’s motivated sellers there. Then we also look at the median home value that fits in what we’re looking for. So if we’re going to be doing wholesale deals then it just depends on the strategy but most wholesale deals – well, it’s really easy for people to get a loan in the $150,000 range, like a hard money or investment loan, so anywhere around there is good. So basically the closer it is, the median home value and that zip code is to that, then the higher that zip code is going to rank. So it’s pretty complex and it’s something that we developed over time but I think the most important part of it is just the cash sales because that will at least lead someone into the right direction. So if they live in a city with like 50 zip codes, then they’re not just trying to guess which ones to get. They can at least know where most investors are picking the deals.

The other thing that I like to do is if someone is a new wholesaler and they don’t want to do this process or they haven’t thought of that or they don’t have access to it or something like that, then a cool thing that we did is we just more build in our buyer’s list, we just ask everyone where their favorite place to invest is in the area. Then so most people are going to repeat the same couple of areas over and over and over and then so you can know where the hottest areas are as well. So I think that’s something that we found to be successful for us starting out without using any data and we’re just basing that off of, what, talking to people and networking.

Danny Johnson: Right. So some of those other criteria you were talking about, you said you use some other criteria. Is that foreclosure rates? Is there a field or something to tick to filter that in List Source, the foreclosure rates?

Lamar Cannon: Yes.

Danny Johnson: Okay. So when you’re wholesaling, you want to give some weight to that to try to determine.

Lamar Cannon: Yes. So if there’s a zip code with a lot of cash sales but not that many foreclosures, that can mean many things. It can mean like all the investors are scooping up the houses before they go to foreclosure. Or it could just mean that most of the sellers there don’t really get into financial distress. We like to do the places where there’s high cash sales as well as high foreclosures because that means that a lot of these houses are still getting past investors and still going into foreclosure, so that might mean there’s not enough marketing getting out to them or there’s not enough solutions that they have to get rid of their house in a creative way so that they can prevent the foreclosure. The amount of foreclosures is kind of like a motivation indicator for us to tell us how motivated are the people that live in this zip code on average.

Danny Johnson: Great. So what are some of the other criteria then?

Lamar Cannon: The median home value is another criteria for us.

Danny Johnson: Basically if you’re not downloading all those records and paying for them, then you’re just doing a filter to get the count?

Lamar Cannon: Yeah, you’re doing the filter to get the count and then you can export the count by zip code, MSA, city, different things like that. So you can export that and then it will send the information to your email and then you can just open that in an Excel spreadsheet and then start building your data there.

Danny Johnson: All right, cool. What other fields do you use?

Lamar Cannon: We also use days on market because that’s important because even if everything else is good but the days on market for that zip code is really high, let’s say it’s like 90 days on market and that means like it’s not a good chance that if I get something there I’m going to be able to move it quickly.

Danny Johnson: Do they have that on List Source?

Lamar Cannon: No. That’s not on List Source. We have to search around to try to find that. Some cities, we have to get it from Redfin. Some cities we have to get it from Trulia. Some cities we can’t find it and so it’s just kind of like a majority of them, we can get off using Redfin.com and we use that a lot in our business because it’s like the most versatile version of a non-MLS site that I’ve come across.

Danny Johnson: All right, cool. So that’s determining for wholesaling. So if somebody’s going to be rehabbing, do you think that they would use the same sorts of list, maybe ones that are more focused like on the median home values?

Lamar Cannon: Yeah. I think the cash sales wouldn’t really matter as much for someone that’s flipping a house. I think the thing that will matter more is the median home value and the days on market; that will probably be the most important because if you’re doing a rehab, you don’t want to have a rehab in an area that has average of 90 days on market even though that’s how long someone will stay on there. But if 90 is the average then that means there’s quite a few that stay on longer than that and there’s not that much a new buyer actually going on in that area. So we like to keep it under 30 to 40 days if we’re going to do a rehab, then we only do it in areas that are less than 30 or 40 days.

Danny Johnson: Especially in Texas, the way the market has been, I mean, if the house isn’t sold in 30 days then it might be just priced too high is all it is.

Lamar Cannon: Yeah, definitely. The other thing, I think the thing that’s even more important in this even if someone skipped like selecting a market, I think the more important thing is the mail that you’re sending out or the types of marketing that you’re doing. So let’s say you have the perfect area but you send out the exact same marketing that looks exactly the same as everyone else, then the chances are that your response rate is going to be really low. A good tip that we found is we try to find what everyone else is doing and then try to figure out a way we can stand out or do something a little bit different that will still get us a good response rate and when we do that, we’ve noticed that we get deals where other people don’t really get deals. So there’s a couple different ways that we found this to be useful.

So one is I can devote a really good relationship with someone I bought a house from or a really good relationship with someone that didn’t sell me their house that owns the house or someone I know, maybe another investor. Then tell them that every time they get a piece of mail that says anything about buying their house, I ask them to save that and then every now and then I go pick that up for them or someone on my team will pick that up from them and then that way we get to see what all the different direct mail is that other investors are sending out. Then I also talk to people that are taking like any kind of real estate course and ask them what kind of marketing do they do and different things. That way, you know like because if there’s a real estate course being taught then you know that a lot of the students are doing exactly the same thing and so they’re doing the exact same kind of sorting their list.

In Austin probably about 3 years ago, most people were doing absentee owners with 3-2’s, houses that have 3 bedrooms and 2 baths. So what we did is we did those 3-2’s as well but then we also did houses that only have one bathroom and houses that are less than 800 square feet. We ended up getting some really good big deals that the seller didn’t get any other letters from anyone else because most people were missing out on that. So it’s just finding out those little places that people are missing and when you have those places that people are missing, you find yourself a little gold mine that will last for a year or two. So that’s probably all you need if you want to grow your business pretty big. I think that’s some things that helped us out in terms of like direct mail once we identified these hot markets. Because if I’m in a hot market in an area that’s really hot, like the way that we like it, then for sure there’s going to be a ton of marketing going out to that area so you just have to figure out a way to stand out as well as be a little different and go places where people aren’t really touching.

Danny Johnson: Yeah. I think that goes to the general message of take the time to think through what you’re doing and do something different. The thing with everybody doing the same stuff is like “I heard so and so say that this works really great so I’m just going to do this too.” Then you have everybody sending the same message and there’s no way for those sellers to know that it’s from different people and if they get another one from that person whether it’s from them or all the other people that send that same postcard. I’m sure you’ve seen that postcard, the “urgent notice” postcard I think.

Lamar Cannon: Yeah.

Danny Johnson: You know, typical sellers get about 30 of those. If you’re sending them too, you might want to think about changing that. You know what I mean?

Lamar Cannon: Yeah, definitely, definitely. We send out like all different stuff. I think the main thing is, people need, no matter what, you have to test things on your own. You have to know that every time you do something, you need to measure it and then see how well it works and try something different as well and then see what gets you the best response and then do more of that. Because that’s how real businesses work. Like right now, the thing that we have in the industry with the newer investors and the different things, is everyone’s getting taught what to do but they’re not really learning how to think. I think the thing that helped us out is like – I had a business background before this so my whole career is spent learning how to think and I was in sales and different things, so you learn the basic system but then you also learn how to think and how to innovate. So if Silicon Valley, if all they did was just copy off each other and then it wouldn’t be as innovative. I think that’s a lot of what we’re doing in real estate, some of us, is we’re copying each other because that generates a certain level of success but then we get that cap and then I found that once we apply basic business principles and we systemize things and we test our marketing and do different things and we keep continuously learning things, we take training courses ourselves. The thing is, is we take that information, what we get, and we make that information fit into what we want to do and we make it fit into how we want our business to run and we make it fit into what can make this information more effective. Because a lot of the information, let’s say you get some information about how to do marketing, all right, great, well that information is set specifically to be scalable or to be received by everyone in the United States. So maybe there’s something in your market that you can do that’s a little bit different that someone in Seattle can’t do or someone in Florida can’t do that wouldn’t be as effective but in your market it will work really well because you know something different about your market and you can include that with your systems. I think that’s the thing that a lot of people should just focus on is how can I make my business better and different and how can I run my business as a real business and not just like a copycat version of what someone else is doing because it’s good they model after successful people, but the other thing is you can also innovate and make it a little better and put your own spin on it because it’s just like Bruce Lee. Bruce Lee learned martial arts from someone but he ended up innovating on that and creating his own style of martial arts that he felt will be the best type of martial arts and it ended up being pretty successful.

Danny Johnson: Yeah, it’s true. So I wanted to focus more also on sort of these areas to market to and what criteria for people that maybe through looking in their own city. So for me, something as sort of how convenient is it for you, so if you’re in a big city especially like Houston or something like that where you could spend two hours going to a property and back very easily and it doesn’t make sense for you to be wasting all your time doing that. So it’s like pick a section of town like you said median home price area, sort of where the majority of the buyers are.

Lamar Cannon: Yeah, absolutely.

Danny Johnson: If you’re going to be doing flips and rehabs because you want to have the biggest pool of possible people to be able to buy your property when you’re done with it.

Lamar Cannon: Absolutely.

Danny Johnson: So you want to give any tips on that or maybe even like where to avoid if you’re going to be flipping houses?

Lamar Cannon: Well, it depends how your business is set up and who your acquisitions person is. So if you’re the acquisitions person or you have one acquisition person, then I guess everything depends on how far are you willing to travel and how much time are you willing to spend on that. With us, we used to start out and only do like a one hour radius within where we live or where our acquisition manager lives. Then we found that was kind of limiting for our business. But I think that’s a good way to start out, is just doing an area where you would have no problem getting in your car right now and going there and meeting with the seller because I think if it’s doing your something and you live in Dallas and you’re trying to do some deals in Houston and you’re the acquisitions person that has to drive down there, then you’re probably going to either miss out on some deals or you’re going to put tons of miles on your car trying to get deals because usually we found that out of every 25 leads, we get about 1 deal out of those. We can probably bring down that a little bit but we have a specific criteria on the deals that we bring in.

Well, yeah, I think that it’s just kind of like a personal preference. Some people will say stay away from like the hood areas. Some people will say go to the hood areas because that’s where you make the most money. Some people say only in the high-end areas because the profit margins are bigger. Some people say invest in the mid-class areas because even in a down market, those areas, people are always going to need homes in those areas. So I think it’s one of those questions where there’s not like one specific answer. It’s just kind of like what you want in your business and what works for you. So we’ve tried all different ways and we found that certain things do work for us and certain don’t. I think the main thing that I always ask is how much time is it going to take and how stressful is it going to be. If either of those isn’t the answer I want, then we don’t do it. But other people are – I mean, I guess it just depends because everyone has their own strategy and some people will work 24/7 on this and I’m not really like that.

Danny Johnson: Right. Yeah, I think it’s a matter of, like you said, the hassle factor I think and the David Hasselhoff factor. It’s the hassle factor. Because sometimes like it is easier to find deals in the war zones, right? But then getting rid of them is kind of a problem and there’s the risk factor of just being over there. So you got to weigh that and see if that’s just what you want to do or whether you’re comfortable with that or not. Then to me, it’s more of where’s the balance because I want an area that’s not so hard to get deals but then is also easy to sell. So if I’m going to do the flips or the wholesales, I’m looking at both of those things. I want a lot of investors like you talked about before and sort of an inventory of houses that are a little bit older, at least 20 years or something because if you go into an area, it’s only 10 years old, it’s going to be kind of tough to find motivation from houses being in disrepair.

Lamar Cannon: Yeah, definitely. Then when you do have that, sometimes there’s not much equity in those areas either.

Danny Johnson: Well, great, I think we covered a lot of ground on it. I guess the only other thing maybe that I would like to ask is what your sort of process once you determine the areas and how do you start hitting those areas to try to bring in leads.

Lamar Cannon: Once we determine the areas, then we mainly do a direct mail so we do like a pretty targeted direct mail list and then we send that out. Any time we do direct mail, we always set up a six-month mailing. Sometimes if an area is really hot, sometimes the response rate might be .03 percent and then so that sometimes doesn’t really work out because you end up breaking even on the leads. But we always do a six-month campaign. So we do a six-month campaign, we test all our numbers. We see how the response rate is, we see how many leads we’re getting in and then we go from there. Then so I think the main thing is that a lot of people have to focus on that I needed to focus on early on that we got really good at and that’s when we got consistent is follow-up. The main thing that we like is if anyone calls us, that person just became 10 times more valuable than they were just as a name on the list because when they call us, we now have their phone number and most likely we’re going to get their email and then we also know a little bit about their situation and they talk to us. So now we have all these different ways that we can contact them. They remember us a little bit more so even if they don’t want to sell their house for a year, they’re in our database and they’re getting talked to, they’re getting emails, they’re getting occasional phone calls and then we’re just reminding them that we’re the people that they talked to and they liked, and if they ever want to sell their house then they can sell it to us.

Because I think a lot of people that I’ve met and I was this person before where even with different types of sales, once I talk to someone once, and they don’t want to buy or they don’t want to sell to me, then I think that the rest of the time trying to follow up with them wouldn’t be that valuable. But what we found is if we get a deal on like the first round of marketing, we usually do but you can just consider that as being lucky. Then we also know that the rest of the deals that we’re going to get are going to be from either the future mailings or the future follow-up calls or the future things that we do. So we never send out mail unless we have a budget for six months to continue to mail that same list over and over.

Danny Johnson: That follow-up, it just becomes so important and it goes back to, you know, it’s not like it’s something that’s recent where people needed to hear from me more than once, for majority of people to want to work with you. I think the most common statistic given is seven touches or I got to see your message seven times or hear from you seven times. That’s the whole reason why I built REI Mobile. It’s that software system to keep track of your leads and set your follow-ups and stuff like that. It’s exactly because of that, is the majority of people are going to need to hear from you over time and when the time is right, you’ve built the rapport and they’ve had your message and you burn into their brain so that they give you a call, and then you sort of leave the competition in the dust because they’ve been long since forgotten because they weren’t following up. But I was going to say something else about the follow-up part. What’s your interval for mailing to those people in that six months?

Lamar Cannon: It just depends. The shortest time that we’ve done was 2 weeks and the longest time that we’ve done is six-week intervals. It just depends how urgent it is that the sellers call you. If it’s just a regular absentee list, then we probably put that on a little bit longer of a mailing campaign and if it’s some people that are going to get foreclosed on within the next couple of months, six months or so, then we’re sending them stuff a little bit more often because they have a higher propensity to call us and then once they call us, then we now have their phone number, we can call them more often and kind of get to them before they end up running into big financial problems. So we’re just here to help them prevent that and help them get out of that bad situation.

Danny Johnson: Right. Are you a letter or a postcard guy?

Lamar Cannon: I’m still trying to decide. If I send six mailings, they’re probably mixed with some yellow letters, some professional letters, some postcards. But if I had to only pick one, I’d probably pick a handwritten or a professional letter with a handwritten envelope.

Danny Johnson: What do you mean by professional? You have like your business logo and stuff on there, right?

Lamar Cannon: Yeah. Maybe the business logo sometimes but more of like a typed letter instead of a handwritten letter. So we do that and we’ll probably have the website and the business name and stuff like that on there. But it will have like a higher open rate because of the handwritten font on the outside of the envelope. What I found is like I’m always looking for different business ideas and looking around. If you think about it, let’s think about like let’s say AT&T. So AT&T, they send out all kinds of mail, millions of dollars a year on mail. But if you look at some of their pieces that they send, recently within the last six months they started sending your information that you need or their new promotions in a handwritten envelope then when you open it, it’s an AT&T advertisement or something like that. So if I just got that letter and it said AT&T on the outside, I probably won’t want to open it but I opened it because it had that handwritten font on it. Any time I get some cool mail, I save it and I use that as ideas. I started noticing that more like big Fortune 500 companies are using that and so it probably means that it’s effective if they’re going to spend millions of dollars. They’re spending like hundreds of time more on this stuff than I am. Sometimes I just follow what the big guys do and see how it works, and we test it, and it works pretty good. Maybe it might not work pretty big good after this call when everybody starts doing it.

Danny Johnson: I think most people have been doing handwritten letters though in the investing realm for years anyway. It’s just that maybe AT&T is slow to pick up on it now. But the other side of that though too is like when people feel like they’ve been – especially from a big company like that, you know, sort of been duped a little bit like you fooled me into opening this letter that was junk mail. But I don’t know that would come across the same way from an investor because it’s more if you have a personal message inside of there instead of just like some kind of marketing ad that’s like a hard sell on them or something.

Lamar Cannon: Yeah. It matters a lot what you say on the inside but then what I found is if a person is really truly motivated and they’re ready to sell right now, it doesn’t really matter what you send them as long as they open and they see it, they’ll call you. But the thing is, most people at this time in the market aren’t going to be in that situation. So the most important thing is just to get those leads and then bring them in and put them in your database.

Danny Johnson: Right. For this series of podcast episodes, obviously I’ll have more about direct mail and go into that into detail for everybody out there listening. This episode is more of targeting those farm areas but since Lamar had some information to share about that, we went ahead and covered some of it, so I appreciate that. Do you have any sort of horror stories or funny stories of investing that you could share just one?

Lamar Cannon: Horror stories? Let’s see… horror stories. No, not really. Mostly it’s –

Danny Johnson: Maybe just like a funny thing that happened or something.

Lamar Cannon: Let me see. One time I was buying this house in – let’s see what happened. One time I was doing a wholesale deal and I was buying this house. I don’t know if this is a funny or a horror story but it was just like an inconvenience to me so I just remember it. So one time I’m buying this house and we’re going to make a pretty good profit on it and then we were going to close it and sell it to another investor. So we closed our part and the investor, they’re at closing and then they call me and they’re like, “Hey, can you drive by the house and tell me if the neighbor’s car is still in the yard?” So the neighbor had a driveway that was right next to them and I guess the previous seller and the neighbor were friends. So this car was like on the property that we bought and I didn’t think it was that big of a deal but I guess maybe it was, and so the investor is like, “Hey, I’m not buying this house. I’m not signing until the car is moved.” So I go to the neighbor’s house and knock on the door and it’s like a 70-year-old dude answers the door and I’m like, “Hey, is this your car here?” He’s like, “Yeah. I’ve been storing it there and I’m going to leave it there for a little bit.” I was like, “Oh, well, we need to move it because we just bought this house and we have to move it today.” So I knew he couldn’t move it and then I was by myself with one of my friends. So we tried to move the car and then as we’re moving it, the wheels off and then we’re like on this hill. So the car starts sliding back. Traffic is coming and the car starts going into the street and so we end up stopping the car. We get one of the neighbors who can help us out and they help us get the car back into their driveway and it’s just like this big mess. It took us 4 hours and got it all done and called and got the deal to close. But that was probably one of my craziest story that I have. Everything else has been pretty smooth.

Danny Johnson: I was going to say like oh, you got to move a car, it’s not really a crazy story. But the wheels coming off, that makes the whole story – you got to play that part up a little bit more. Yeah, that’s awesome. Well, I appreciate you being on the show, Lamar. Is there a way that people out there listening can get a hold of you?

Lamar Cannon: Yeah. They can just find me on Facebook or Instagram. Facebook: Lamar Cannon. Instagram: Lamardealmaker is my Instagram name. Or LinkedIn: Lamar Cannon. I’ll probably have like a picture of me traveling or something like that, doing something cool. But yeah, just email me or message me that way.

Danny Johnson: All right, cool. Thank you so much for being on the show and I’ll surely have you back on for some more information if you don’t mind in the future.

Lamar Cannon: Oh, that will be cool. I appreciate you having me. This is awesome.

Danny Johnson: Yeah, have a great day.

Lamar Cannon: You too. [music]

Danny Johnson: All right. Another great episode of the podcast and really appreciate Lamar coming on and sharing that information especially the stuff about finding out where the active areas are without even having to pay for it through going to List Source and doing some of that criteria and then doing a preview and figuring out, a tally of records based on that criteria. I’ll go ahead and include the stuff he mentioned in that criteria on the show notes page so that you can check that out because I know sometimes the listing, it’s kind of hard to put it all together mentally or to write it down. Most of you probably aren’t sitting in a desk just listening to this, taking notes. So you can visit the show notes page at FlippingJunkie.com/39, Yes, 39. FlippingJunkie.com/39. And just to iterate the point from Lamar about follow-up, it’s so important. You get leads from people and they’re not sure, they’re not ready to sell at that moment but they’re wanting to find out some information about how it works so they want to know how you buy houses but they’re not ready to accept the offer that you’re making early on so you’ve got to do follow-up, you’ve got to set a way to have follow-up reminders and as you get more and more leads, that becomes sort of difficult to do and that’s why I’ve created that system, REIMobile.com. You should check it out if you have it. Great way to maximize the number of leads that you convert into deals over time because that’s what matters, so definitely is an investment that pays dividends and you get a lot of return from it. So check that out. Check out our real estate investors websites at LeadPropeller.com and I’ll leave you with that. We’ll start getting into the next episode when we’re covering a lot of marketing so you’re going to start generating lots of leads and you want to have a system to help you maximize it. So, have a great week and see you next time.

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12 awesome responses to “Episode 39: [Marketing] How to Determine Your Target Farm Area w/Lamar Cannon”

  1. Mike C on

    I’m trying to preview my list on Listsource and can only see up to 3 sample records. Where do I go to get to the list preview?

    1. Lamar Cannon on

      Here are the steps Mike:
      Once you have finished adding your desired criteria to the sort

      1. Click Purchase List
      2. Click the Tab that says Purchase Partial List
      3. Then select – Custom Selection
      4. Then next to where it says, “Group properties by:” in the drop down select the desired way you would like to separate the list counts (Area Code, Zip Code, State, City, MSA, Census Tract, etc)
      5. (It will take a few minutes to process) – the select export, It will take you to a different page allowing you to email yourself an Excel Spreadsheet that includes your data

      BOOM!

  2. Tim on

    Hi Danny – much of Lamar’s strategy focuses on being a wholesaler trying to find the areas that rehabbers are interested in buying in. What about if you are a rehabber? Do you still suggest sending marketing to the same areas that all of the other rehabbers are buying in? Or maybe focusing on an area that is less saturated?

  3. AJ on

    Can someone document how they find the foreclosure rate per zip code for a specific county?

  4. Jose on

    awesome content for sure, this episode gave me great ideas to find money buyers. i did try it in listsource but i may be doing something wrong tho. however i have MLS access and now im find the cash buyers on there with some sorting, thanks!!