Kyle Burnett
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Show NotesHusband and father to a 4 month old baby. I started investing about a year and a half ago. Ended up with a loss of $700 for 2017 but the first half of 2018 we will gross over $125,000 with a goal of $250k for the year.
Kyle started out in real estate investing just like most investors do. He was unhappy at his desk job and wanted a way to achieve financial freedom. There were some learning curves he had to overcome, though. When he and his wife got married they used the money from the condo she sold to buy their first house to flip. Unfortunately Kyle ended up losing money in that investment.
One of the biggest learning moments in that first house was figuring out how to manage contractors the right way. Kyle found that the contractors weren’t showing up to the property frequently, they were taking other jobs while still working for him, and were spending too much money on supplies from hardware stores. “That was a learning experience,” Kyle says, “Now I check in with my contractors every day to make sure everything is going smoothly.”
Luckily for Kyle he had another property already being worked on by the time the first house was sold. This property went smoother, getting him a decent profit. “You have to stumble a few times before you get the hang of it,” Kyle admits. That’s so true. Starting your own real estate investing business is a learning experience.
Once the first two properties were done with Kyle started getting in the groove with his business. As far as marketing goes, Kyle has been doing direct mail and managing leads on his website. He has his phone number on the postcards he sends with a call to action to text him if they’re interested. “I haven’t gotten too many texts,” Kyle admits, “but a lot of people go to my website from the postcard.”
A mixture of direct mail marketing and having a websites for people to go to has been working really well for Kyle. “I think it’s from people not wanting to make a call, but feeling a lot more comfortable filling out a form online,” he tells. To be honest, that’s what we’ve found works best too. There are so many motivated sellers who get nervous about talking to someone asking to buy their house. The detachment of filling out a form online is more comforting for them.
So what made Kyle get into real estate investing? Well, the condo his wife sold when they got married gave the couple roughly $20k. Initially Kyle wasn’t planning on getting into real estate investing. In fact, it all started with a Google search for what to do to invest the money. “I knew I didn’t want to spend it or just put it in retirement,” he says, “Honestly I just Googled ’ways to invest’ or something like that and real estate kept coming up.”
Kyle knew he didn’t want to build a renting portfolio. “Flipping was more appealing to me. I didn’t like how long you have to commit to renting,” Kyle says, “I didn’t start with Rich Dad Poor Dad or anything. I just searched in Google and did research there.”
It just goes to show important it is to appear online. If you want to get in contact with Kyle you can reach him on his website or email him at [email protected].
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Episode TranscriptionDanny Johnson: This is the Flipping Junkie podcast episode 111. [music] Welcome to the Flipping Junkie podcast, the podcast for flip pilots everywhere. Flip pilots are the house flippers that work more “on” our business instead of “in” our business by keeping a 30,000-foot view. You’re now part of a small group of house flippers that considers themselves flip pilots that strive to build the life of financial freedom and time freedom so that we can spend more time doing what we love with who we love. In this podcast, I give you a glimpse of the daily life of a flip pilot, so let’s gets started.
Hey everybody, welcome back to the Flipping Junkie podcast. I’ve got Kyle Burnett on the show today. He’s a husband and a father to a four-month-old baby. He started investing about a year and a half ago. He ended up with a loss of $700 in 2017. But in the first half of 2018, he’s got a gross of over $125,000 and has a goal for $250,000 for the year. So how did he go from losing money last year into having this much success in the beginning of this year? And that’s what we’re going to talk about on today’s show. I’m super excited to get into it. So let’s get started.
All right, everybody welcome back to the Flipping Junkie podcast. I’ve got It’s a great episode. I was really looking forward to this episode because Kyle had reached out to me back in September of last year. Right, Kyle?
Kyle Burnett: Yeah, I think it was September.
Danny Johnson: Yeah. Here’s the email actually. And he was reaching out just with some questions and wanted a little bit of advice, and I had responded with—I’ve got the email pulled up here actually. Actually that’s when you sent it back to me. So, what I responded with was “I have thought about this a lot and recently gave it more thought as I moved offices. Melissa and I switched offices in our suite and I went through a lot of my old training courses and meeting notes from years ago. What struck me was how many different things I got interested in and tried to learn. I had books on land investing, books on real estate taxes, books on investing and IRAs, books on raising private money,” and it goes on and on. “ And granted all had been helpful but I realized that the success came from when we had focus. Focus on marketing, focus on working the hell out of just three or four lead sources. Putting out bandit signs religiously, driving for dollars religiously, making the effort to get the phone ringing. So making a plan and sticking to it, not constantly thinking about new ways to get leads. Just ways to be consistent and working the sources that I’ve worked for decades for successful investors. Investors that struggle almost always do so because they didn’t master a handful of marketing strategies that they stayed consistent with. So if you can’t be consistent with your marketing and focus each week in thinking about what to tweak within that same marketing channel, you’ve got to hire someone even if just part-time to do it. It’s really that simple. Hope it helps.”
And so, Kyle had responded and he responded with this email here, he said, “It’s really good advice. Appreciate it. I’ve really gotten serious about marketing and committed to spending a minimum of $3500 per month between direct mail and online to generate the consistency of leads that I need. I’m advertising on AdWords, Bing, and Facebook and just sent out 5000 postcards last 2 weeks and plan to mail that list for at least the next 6 months. I’m going to be successful in this business no matter what it takes.” I love that. You know, it’s like committed and sent that email, put it in writing and didn’t say ‘maybe’ or didn’t say ‘I’m going to make a good go of this.’ He says he’s going to be successful.
And then, Kyle, you reached out to me again in April of this year and if you don’t mind, I’ll read that real quick.
Kyle Burnett: Yeah, go for it.
Danny Johnson: Okay. So he responded in April. So he didn’t just send me that email and tried, get frustrated and quit and never to contact me ever again. He sent this email back in April and said, “I wanted to follow up on the email from last year. I’ll give you a short success story. After deciding in September last year to commit to marketing, consistently things have really taken off. Last year I ended up with a net loss of $700 according to my count but had a ton of momentum going into 2018. Three flips underway. This year we finished those three flips, sold two of them which profited 35,000 apiece and the third one was pending. Wholesaled 1 deal for a profit of $20,000 and have another wholesale. We’re closing next week which will profit around 15,000. All in all we’ll generate over 125,000 worth of profits.” And that would be in the first quarter, right, of 2018?
Kyle Burnett: It will be the first half by the time —
Danny Johnson: Oh, once it all closes.
Kyle Burnett: By the end of this month. Yeah.
Danny Johnson: First half of 2018. “It’s been a rollercoaster but we’ve got the ball rolling and well on our way to hitting a goal in profits in 2018. And wanted to thank Lead Propeller and Flipping Junkie podcast for it.” So I thought that was really awesome and that’s why I asked you to be on the show because I want to find out what that was like, how you got started in this business first but then how you took from that email just so many months ago and then ended up here and find out how you did that.
Kyle Burnett: Yeah. So I got started about a year and a half ago. I had been researching a lot on real estate investing, listening to all the podcasts and that stuff. Then I was pretty fed up with my job at the time and my wife and I had saved up some money. So I ended up quitting my job about September of 2016 it was and then just jumping in full-time. Actually the first house that I bought, we ended up losing a couple thousand dollars on after like five months of rehab and me doing a $5 an hour work on the house. But by the time that happened, i had already bought the second house and was moving forward with that one. That one ended up going a lot better and then had wholesaled a third house in the middle of all that. So things just kept going up and up and I knew that going into the second half of last year and this year, that the only way I was going to be able to scale this up to where I wanted it to be was to get more deals and get more marketing and I knew that the number one thing in this business is to have deals. If you don’t have deals, nothing else matters and if you have deals, then you can figure out a way to make money off of it. There’s several ways if you have good enough deals. I think I listened to a podcast actually that you had. I remember it was last summer on the way to visit my brother in Costa Rica. It was Cody Hofhine, he was on and you guys were talking about the numbers that it takes and the dollars and I think it was about $2500 that it costs per acquisition per deal. And so that’s when I decided that alright, I’m willing to spend actually a little bit more than that and see what it gets me. So that’s what I did.
Danny Johnson: Nice. Yeah. So it’s understanding that it can cost that much to get an acquisition and so when you kind of dip your toes in and just try something out for 250 bucks and then get frustrated, you didn’t get a deal from it, to understand that it wasn’t very likely to get a deal. If you did, you got lucky. Or you just found some source that nobody else knows about and it’s a goldmine of cheap deals, right?
So what were you doing before flipping houses and how did you get interested in actually going into flipping?
Kyle Burnett: What I was doing before, I was actually a headhunter so I was in sales and recruiting for a headhunting company. We recruited engineers in manufacturing positions mainly. And so it was inside sales, just pounding the phones all day, cold calling and so pretty fed up with that. The way I got interested in real estate investing, actually it’s funny. My wife, we got married about 2 ½ years ago. And I owned a house, she owned her condo and she sold her condo, and I had a decent chunk of change from that $20,000 or $30,000 and we were trying to figure out what we wanted to do with it. So, I started Googling and real estate investing was something that came up
Danny Johnson: So what was that search term? “How to make money from other…”
Kyle Burnett: I don’t know. Maybe I was just searching real estate investing. I think I might have looked into like rentals or something like that, buying rentals. And then the more I researched it, the more I felt like I wanted to maybe not get into rentals because I wanted something more short-term to hopefully quit my job within a couple of years. So anyways, that’s how we got into it, was just we had some money that we could do something with and I didn’t just want to put it in savings or retirement or something like that.
Danny Johnson: That’s cool. That’s probably one of the first answers that wasn’t talking about Rich Dad, Poor Dad. I don’t know how many people. You know what I mean? That book has got to be responsible for at least 50 percent of the investors out there.
Kyle Burnett: Oh yeah, without a doubt. Everything you hear is Rich Dad, Poor Dad.
Danny Johnson: Right. And I think that was one of the first ones I’ve read too and it got me really super interested in it. But yeah, so had some money and Googled, looking for a way to do it and found real estate investing and flipping houses. So, when you started out, did you have any idea of what your goals were as far as wanting to acquire rental properties? Or you just wanted to get in and flip houses and see what you could do with it?
Kyle Burnett: Yeah. I didn’t have any specific goals. It was mainly just I was looking to get into it. Sorry, I’m cutting off. Anyways, so I didn’t want to get into rentals because I didn’t want the long-term, how long this was going to take and then I also didn’t want to deal with tenants, at least not right off the bat. So I just decided I wanted to flip houses. I read a lot and listened to a lot of Bigger Pockets (the podcast) and decided like that’s the route that I wanted to go. And the goals for last year, I mean really, I was hoping to get some under my belt and make it a profitable year and try and at least replace my income that I made the previous year.
Danny Johnson: So how did you find that first deal that you lost money on? The first one was the one that you lost money on.
Kyle Burnett: Yeah, the first one. I actually found on the MLS and it was, you know, I had sent out, looked out several houses on the MLS because I’m licensed and sent out several offers, kind of lowball offers and this one came back and apparently it wasn’t lowball enough.
Danny Johnson: Do you think it was a combination of that and just maybe do you think spent too much and took too long?
Kyle Burnett: Yeah.
Danny Johnson: What were some lessons from that one that you took away that you won’t…
Kyle Burnett: Yeah. It was a combination of everything. I think probably could have made some money if I knew back then what I know now. And then the contractors were just taking forever. You hear it all the time but I’d go to the house and do what I was doing working on the house and painting or whatever and then the contractors, they might not be there for days at a time and they were working on other jobs, picking up other jobs and things like that. So that was a big one and then the material costs got kind of out of hand as well. They were buying stuff at Home Depot on my account but it just seemed like they got pretty high. So those were probably the two biggest things that took the profit out of it.
Danny Johnson: So what have you done to make sure that doesn’t happen anymore?
Kyle Burnett: Well, I check in on the contractors. I have got some different ones that are working out pretty well, but I’d check in on the GCs pretty much daily to make sure things are getting done on the timeline that they’re getting done. Then as far as the materials and stuff, I make sure pretty much daily I look at what’s been purchased and does that line up with where it should be and are we spending—you know, these are flips in the $100,000 to $150,000 range, so are we buying stuff that the finish is that appropriate for that range.
Danny Johnson: So you don’t spell that out to the contractor before the job, you know, what materials to use and scope of work?
Kyle Burnett: To be honest, I haven’t been and that’s something that I need to get better at.
Danny Johnson: Yeah. And you’ll free up from having to check on them every single day, if you have everything on a contract that spells out what materials to use and what’s expected and then when they bid, they’ve got to include all that stuff, so if it’s down to the light fixtures and what the skew numbers are and the cost and everything, then you don’t have to worry about it longer and it’s really on them. So, do that. It’s really helped us to be able to do more by not having to worry about all that stuff and check on that.
Kyle Burnett: Yeah, that’s really good advice. I’ve been pretty busy and so it’s like, “Oh, do I have time to do that?” But I can’t get an hour to write a scope of work. It’s going to save me days in the future.
Danny Johnson: Absolutely, yeah. It’s kind of fun to go to Home Depot or Lowe’s or whatever and just write down skews and pick out the things that you’re going to use for the typical price range of a house, and then you’ve got it all written and once you start copying the scopes of work, you don’t usually change them a whole lot for each property, you know, the material. I usually have the material spec as a second page or a separate page and it’s got light fixtures, living room, bedrooms, all that stuff and then it’s all in there. Man, so yeah, so that’s a good way to do it. And then not having the materials separate and just have them as a part of it so that you’re not concerned whether they’re spending money on things they shouldn’t be because they bid it out.
Kyle Burnett: Yeah. I think I heard, I got that from the podcast that Melissa was on. You guys, you just bid materials and everything, right? They have a list of what the materials are so they know.
Danny Johnson: Yeah. I think that happened from somewhere for our first ones because we just said “how much to do the job?” basically and then they did it but then whenever we would come to see things, it’s like, “Oh man, what’s with that fixture? Like, where did you find that?” and stuff like that. And it was like, we can’t do that anymore. We’ve got to tell them exactly which one too that way. And then you can go and find the ones that don’t barely cost anything but look great and make sure that you know. And then everything kind of coordinates in the house too so you don’t end up with some brass fixtures, some silver ones and all that kind of stuff. We’ve been through a lot of that, mostly whenever I was managing all those jobs and all those things. So you did the first one on the MLS. So what happened? Did you switch to mostly trying to find off-market deals then after that one?
Kyle Burnett: Yeah, it’s 100 percent off market. I haven’t bought anything off the MLS. To be honest, I haven’t even looked on the MLS in probably six months and there’s probably maybe 1 or 2 that I’m missing out on but the off-market deals are way better, have way more profit margins and I think even though there’s probably several investors that are mailing to them, it’s not near the competition. What I found is basically, if you answer your phone or get back to them very quickly and try and get out and see the property as soon as possible either that day or the next day, I mean, you’re weeding out 90 percent of the other people that are marketing to them.
Danny Johnson: Yeah, that’s an amazing thing, yeah. I’m glad you brought that up. And I don’t think people realize that that’s the case. Like it’s kind of who’s speaking to them first and getting over there and getting the deal.
Kyle Burnett: Yeah.
Danny Johnson: I want to find out how was that for you going from shopping on the MLS and making offers to agents and then making the switch to actually having people selling a house call you and you were going over and talking to them. How was that for you?
Kyle Burnett: The first several were pretty awkward, kind of, and just uncomfortable. But once you do it, I mean, 5 or 10 times, you start getting a whole lot more comfortable talking to sellers. The inbound calls, they never get fun and having the people cuss you out.
Danny Johnson: Mostly from direct mail, right? Or do you get that from anything?
Kyle Burnett: I get them from the website, from the direct mail. But it’s just comical. You know, getting comfortable with the seller, it’s just something that you just have to go and do and get over and, you know, I look back on there was one that I sent out. It was before I quit my job and I really should have locked this down and I looked back a couple of weeks ago to look at this property and see what they had made and it about made me sick to my stomach. I mean, this guy was, it was like a deal waiting to be done and—
Danny Johnson: Oh, no.
Kyle Burnett: And I wasn’t confident and I didn’t have financing in place at the time. But you know, it’s one under my belt and it’s a learning opportunity and you just move forward. And you’re going to have a lot of those in the beginning. So once you get it, now it’s like it’s nothing. You go on several appointments a day or a week.
Danny Johnson: I think it’s smart that you looked back to look at what happened with some of those. To find out what’s going on, right? Like if you missed out why is that and can you benefit from it. Do they pay way more than you ever would have and you can say “well, that’s a buyer for wholesale deals from me” and stuff like that. But a recent, probably two years ago, maybe three years, I think it was two, the same thing happened to me, but I actually bought in a wholesale, but I underestimated what the end value was when I wholesale. I still made, I think we made like 40 or 50 in a wholesale which was crazy. But then whenever I saw like a year later, I was curious and I went and looked what they sold it for. And I think whenever I did the numbers on it, had we done the rehab and sold it, that was like 300+ a profit.
Kyle Burnett: Oh wow! Maybe we should have flipped that one.
Danny Johnson: Yeah. But I had no idea. Even whenever I saw it, I couldn’t believe that somebody paid that much for the house after it was done.
Kyle Burnett: Yeah. Well, and these days, the market, it’s like what you buy it for and at least in where I’m at in Cincinnati, I mean, what you buy it for and I calculate the ARV and then four months later you look at it again to see what you should list it for, and it’s like, that can be 10-15 grand more, you know, a conservative ARV.
Danny Johnson: Yeah. And it’s tempting to start changing your numbers a little bit but you got to be careful with that. I always look at it like if it goes up, that’s just extra that way. So that’s cool. So with the off market, did you find that you had any questions asked of you directly from sellers that you didn’t know how to answer and how did you deal with that?
Kyle Burnett: I don’t think there was anything that I didn’t necessarily know how to answer. I just walked in and acted like I had been doing this and knew what I was doing. Nobody really was asking “Did you just start doing this?” or anything like that. They might ask me how long I’ve been doing it and I just say, “You know, a year or so because I’ve been looking around and stuff.” But I think if you walk in and you act like you know what you’re doing, then people just get a sense that you do. And even now, I might get questions that I might not know how to answer but I’ll just tell them that I’ll figure that out or a lot of those questions are also stuff that the title company deals with and I just say, “Hey, we have people that we deal with. We have a title company and this is the process. I get this signed, I send this over to the title company and then they’ll reach out to you if they have any questions or need any information.” So you can kind of put that on like, “Hey, you know, this is where my expertise is,” and then I have people that I work with that that’s their expertise.
Danny Johnson: That’s excellent advice. I used to take the cards for my closer or the title company and have those with me at appointments and then if they had questions like that, I would give them the card and then go and tell them to call them and ask them any questions they want about title or whatever. And knowing that they could ask about us and that our closer or the title company will say “yeah, they’ve closed hundreds of deals here and they always do what they say” and all that kind of stuff. It’s just a helpful thing.
Kyle Burnett: That’s a good idea.
Danny Johnson: But your statement about the whole confidence thing. You know, about going in and just not making it seem like you didn’t know what you were doing. Even though you might have some of those doubts and stuff like that in the beginning. When you consider somebody that’s considering selling their house and they’re talking to a stranger that’s in their home and make them an offer to buy it, if they don’t feel confident in your ability to be able to buy it, what are they going to do? They’re going to be like, “Well, I don’t know. I didn’t get a good feeling about that guy whether he was going to be able to. He didn’t seem like he knew what he was doing.” And not from the answers but more just from how you’re presenting yourself and I know that’s kind of scary to some people that haven’t done that and worked with motivated sellers because they worry about those initial ones or how it will go, but like you said, fumble through those first ones and it just gets easier.
Kyle Burnett: Yeah, definitely. You might blow one or two in the beginning just because you don’t know what you’re doing or you’re not confident and that’s just kind of, you know, your entry into the game. You just keep moving forward. But yeah, the people, especially the off-market deals, these are people that most of the time have some sort of, you know, there’s a reason that they’re calling you and not a real estate agent and so they just want to feel confident that you’re not out to screw them because they’re getting a postcard, they’ve never met this person so the more confidence you have and the more personable you are, just act like a friend that’s trying to help solve a problem, not somebody that’s trying to take advantage of them.
Danny Johnson: So do you still go on all the appointments yourself?
Kyle Burnett: I do, yeah. I go on all the appointments. I don’t have anybody that works for me. I just hired a virtual assistant last week, but pretty much everything is through me right now.
Danny Johnson: Whenever you go there, do you make it a point to kind of like sit down on the couch and talk with them? Or do anything like show them comparable sales or anything like that?
Kyle Burnett: I haven’t done anything like that. Usually I just walk in with my notepad, the padfolio with different stuff and then I walk through and usually take pictures of the house just so I can look back on them. Then we’ll stand there and talk for a couple minutes about the process and either I’ll make an offer right there or if I need to go and calculate something, then I’d let them know, I’ll get back with them within 24 hours. But I think telling them, explaining the whole process to them helps ease their mind because they understand that this is something that I have done before. And you can do that even if you’re brand new. If you know the process, you know, I’m going to make you an offer and once you accept the offer, we send it off to the title company. It’s a standard. You’re doing the same thing as everybody else is after that.
Danny Johnson: Yeah, yeah. So explaining that and helping them understand exactly what’s going to happen next so they know that you know what you’re doing. What other things are you doing with regards to—You have acquisitions. How many acquisitions do you think you go to on a week, appointments do you go on a week?
Kyle Burnett: I probably go to I’d say 5 or 6 on average a week.
Danny Johnson: Break down the rest of your week roughly like time spent on doing things.
Kyle Burnett: The rest… To be honest, that’s a good question and that’s probably something that I need to look at and see where my time really is spent. But part of it is checking on the houses that we have going on. Part of it is listing the houses and dealing with the ones that we have on the market right now. A good part of it is just following up with sellers and getting a game plan on how I’m going to send out the next marketing or follow up with them. Managing the leads that I have right now which is something that managing the leads and having some sort of follow-up system, I’ll speak to that real quick, is key. Because I wasn’t doing that and I know there’s some that have fallen through the cracks. I use Podio. But whatever the system is, you just need something and it can be a pretty simple system. But something they’d continue following up because now I’ve heard the numbers 30 to 50 percent of the leads are closed down the line and not on the first contact.
Danny Johnson: That’s pretty much what you’d find too.
Kyle Burnett: Yeah, that’s what I’ve been finding lately and some of those are even you just continue sending postcards. We bought properties from people a year after we’ve talked to them and they just keep getting our cards because they’re just on the same mailing list.
Danny Johnson: Do you change up your postcards at all?
Kyle Burnett: I haven’t been. Actually the last batch of letters that we just ordered, I had changed to Yellow Letters. I was just using a postcard that basically said “My name is Kyle Burnett. I’d like to buy your house at 123 Main Street.” I actually have a postcard here. “If you’d like a quick cash offer at a fair price, please text or call me directly so we can talk. Thanks.” I got the phone number and website on there.
Danny Johnson: Nice. How many people text you? Does that happen often where they just text you or no?
Kyle Burnett: No, I don’t get very many of the text.
Danny Johnson: Yeah. I’m not sure if we’re trying that or not. I think that was a discussion at one point. I don’t know if that’s what we’re doing or not at this point.
Kyle Burnett: The bulk of them are calls and I think having the website on there, there’s a lot that go to the website and it’s the people that maybe don’t want to pick up the phone and call but they’ll fill out a form on the website.
Danny Johnson: I was going to post your website on the show notes page and this is show 111, so it will be FlippingJunkiecom/111. If you’re okay with that.
Kyle Burnett: Yeah. That’s great.
Danny Johnson: Helps for SEO too so that will be good.
Kyle Burnett: Yeah.
Danny Johnson: So where are your preferred leads coming from? What are the better leads? Where are you getting those right now?
Kyle Burnett: I’d say it’s probably a split between what we get from online marketing and the best list that I have are the tax delinquent list. In our county it’s anybody that’s at least 2 years behind on their taxes. It’s a pretty difficult list to obtain and you have to be somewhat computer savvy to be able to figure out because they’re all in parcel numbers and not addresses. So I think the competition is a lot lower and these people are at some point, if you haven’t paid your taxes in 2 years, what are the odds you’re paying them this time? At some point, they’re going to have to sell the house or figure something out. The good thing about that is, most of them have equity in the house because the houses are usually paid off because if there’s a mortgage then those taxes are getting paid. Get definitely online and probably the tax delinquent list are the two best that I’ve got right now.
Danny Johnson: Nice. And what are your goals moving forward? Like what do you hope to do for the rest of 2018? What are your plans?
Kyle Burnett: For 2018, my goals are $250,000 in gross profits. My goal is two deals a month. So really, I’m looking at one flip and one wholesale although right now the profits on the wholesale versus flip are not that much different but what the market is. So a lot of them, we’re going back on the MLS or sending out to a buyer’s list. But yeah, $250,000 for the year in gross profits is my goal and I think we’re well on the way, if not going to be able to exceed that because I plan on putting even more money into the marketing right now.
Danny Johnson: So do you feel like that was the biggest difference from last year to this year? It’s just being comfortable with making the commitment to invest in the marketing to get the leads and deals.
Kyle Burnett: 100 percent. The marketing is what helped us get to where we are right now and get past that one flip at a time or one house every couple months or whatever it was. You have to be consistent and committed to the marketing because like you said, if you’re just putting in $250, $500 a month and then you get frustrated that you’re not getting any deals out of it, then you’re probably not going to get any deals out of it because the numbers just aren’t there to support it. When you start getting in to $2500-$3000 a month, then you can expect a deal or two deals a month and if you have maybe a month that you don’t do a deal or whatever, then maybe next month you’ll do two. But getting committed to the marketing is by far the number one thing that you can do because without deals, you have no business.
Danny Johnson: Absolutely. So do you know what your numbers are for how many leads it takes for you before you get a deal?
Kyle Burnett: Roughly? I haven’t tracked that well at all. Honestly, roughly I have no idea.
Danny Johnson: That’s probably what, probably 10 or 20?
Kyle Burnett: Probably. Yeah, I’d say 20 or 25. I need to track that. There’s a lot of stuff where my business can improve but I’m kind of more of the take-action-and figure-stuff-out-later.
Danny Johnson: I love it, yeah.
Kyle Burnett: First thing. I had no idea that we were $700 in the hole for the year last year. So when I broke that news to my wife, I also followed up with the fact that we’d be over $100,000 for the first half of this year.
Danny Johnson: So you waited till then to tell her about that.
Kyle Burnett: Yeah. You just have to keep moving forward. That’s another piece of advice that I would say is like you can sit there and track metrics and you can sit there and have the nicest Podio Globiflow setup or CRM or whatever, but at the end of the day, it’s just getting the phone ringing and you can tweak that stuff moving forward.
Danny Johnson: Absolutely. You got to build some sort of traction at least to even be able to have enough numbers to really do anything with.
Kyle Burnett: Yeah.
Danny Johnson: That’s a good point. If you’re tracking this stuff and you’re looking at these things and trying to tweak your funnel, but you don’t have enough coming into your funnel, I think you’re going to get a lot of false positives and a lot of false negatives where you just don’t have enough information to go on to really make those decisions whether to stop something or start something else or do more with another. That’s a good point.
Kyle Burnett: I think if you’re not sending out consistently for the same list for 6 months, then there’s not enough data there. If you just got one deal or two deals, you have no idea Did you just get lucky and hit this person? Or is this really a trend that this is a good marketing tool or this is a good list or whatever.
Danny Johnson: I was going to ask you too on the tax delinquents, how many of those are you mailing per month roughly?
Kyle Burnett: It’s not a ton. It’s between 2000 and 2500. By the time I narrowed it down to the people that were two years behind and then I took out extremely high houses and then houses that were valued at $10,000 or whatever, it narrowed it down so it’s pretty an inexpensive list to mail to and the response rate is better than anything else I’ve gotten.
Danny Johnson: What do you do in the postcards and letters through?
Kyle Burnett: I use YellowLetters.com. I know a lot of people use them. I found it to be the cheapest that I found. I don’t know. I’m sure there’s others out there but they do a pretty good job. I can’t complain.
Danny Johnson: For the postcards and the letters?
Kyle Burnett: Yeah. For both.
Danny Johnson: Okay. Do you have any plans to try out any other kind of marketing or are you just kind of working on what you’re doing now and just doing more of it?
Kyle Burnett: I’ve got some plans. I do want to start getting some bandit signs out there. I think the way I’m going to do it is hire somebody for whatever, a couple bucks a sign to set them out and see what that looks like. I actually bought a bunch of bandit signs about a year ago and never got around to putting them out.
Danny Johnson: How many do you have?
Kyle Burnett: 200.
Danny Johnson: Is it legal where you are?
Kyle Burnett: Is it legal? I don’t think so. I don’t know if it’s legal or not. I think in some places it is and some places it’s not because I have seen signs that are up for weeks at a time in some places and then other places it will get taken down in one day.
Danny Johnson: Yeah. You talk to many other investors in your market?
Kyle Burnett: Yeah, I do. I’ve got a monthly meet up that I attend and then I’ve been trying to build a buyer’s list so I’ve been reaching out more to some other investors because what I realized is there’s a lot of properties that don’t fit what I want to do for a flip but they might fit other investors and so if you’ve got the leads coming in, if you can have a decent amount of people on your buyer’s list to take leads that might not fit what you want, then there’s profit there.
Danny Johnson: Nice. So do you find them on Meetup.com or something? You found an investor meetup?
Kyle Burnett: I found it on BiggerPockets.com and it’s actually Joe Fairless. It’s his meetup here in Cincinnati, so it gets pretty good. We get a pretty good amount of people there.
Danny Johnson: How many people would you say show up?
Kyle Burnett: The last one was about 50. It was a lot and it was probably about half of them were new or newer investors. Then there’s also a lot of value in the Facebook Group in that group because everybody shares contractors and recommendations and things like that. So it’s pretty nice to have that group in there to help each other out.
Danny Johnson: Yeah. To see if anybody else is having success with bandit signs or if they’re getting in trouble for the bandit signs or that kind of stuff to see about doing that. I kind of feel like the people that get in trouble are the ones that stick them up really high up on all the telephone poles and put 50 of them down a mile-stretch of road.
Kyle Burnett: Yeah. Do you guys not do bandit signs anymore? I know you used to.
Danny Johnson: Yeah, we used to and there was talk of doing it again, but I don’t think that we have. We’ve been focusing most of it behind online just doing, getting enough from that to not be doing some of the other stuff. We were going to get back into the driving for dollars stuff. Melissa saw good numbers from that.
Kyle Burnett: Really?
Danny Johnson: We didn’t do a ton of deals from it. We didn’t do much of it at all in the last year but she was wanting to get that going again.
Kyle Burnett: So let me ask a question. When you do driving for dollars, you and Melissa aren’t out driving. Do you have an acquisitions manager or do you hire people to drive for dollars?
Danny Johnson: The people that are working with us are going out and doing it. But I actually enjoy doing it and I was thinking of taking one weekend or one day a month and just go on and driving. We also want to buy more long-term investments, long-term properties. So I was thinking it would be good to get back out into those areas because I haven’t gone out to look at houses in so long. It would be good to go out and see the areas again because I know that the values have gone way up.
Kyle Burnett: Sure.
Danny Johnson: And just get an idea and feel again for those areas.
Kyle Burnett: Yeah. I was looking into doing driving for dollars and the bandit signs. Those are probably the two things that I would add to what I’m doing now that I feel like the direct mail and the online stuff is going pretty good.
Danny Johnson: It takes a little bit more effort but really, I think those are the things that it’s like people have success with those and then feel like they need to move on and do something that doesn’t require as much work. But then they don’t have as good as results and so it’s kind of good.
Kyle Burnett: Yeah.
Danny Johnson: I’ve always been blown away too because you would think after these many years and this many investors that all the vacant properties would be found and bought. You know what I mean? By driving for dollars. But it’s just there’s always plenty of them.
Kyle Burnett: I think maybe finding the owners but then again I guess somebody has got to, I mean you got to be able to find them. So yeah, I think there’s just not a lot of people doing the driving for dollars. I think people are sending postcards. I mean, you definitely see stacks of postcards and letters. I want to tell you a story. I had a guy that we’re actually buying the property next week. He called me and it was a different phone number. I use CallRail for my call tracking but this one was actually directly to my cellphone. He tells me that he has gotten my letter and he’s interested in selling his house now and I asked him how he got it, and he said, “Oh, I’ve held on to this letter. I got this a couple of years ago.” He’s held on to it for two years and he calls me up and when I went to meet him at the appointment, I said, “How many other investors did you call?” because I knew he was going through his stack and he said, “I had about 10 and I called about 8 or 10.” I said, “How many of them did you get a hold of?” And he said, “I think it was like 4 or 5 that actually answered.” One other guy was supposed to meet out at the property at that same time and I was the only one that showed up. There wasn’t any other real competition there. But it just goes to show you that A, if you stay in the business for even—you’re not looking at 10 years—a year or two, then you’d probably beat out 80 percent of the competition and then just answering the phone and showing up at the appointment.
Danny Johnson: It’s not rocket science, right?
Kyle Burnett: It’s really not. It’s funny how much people put into marketing and then they don’t follow through on the calls, answering the calls or calling them back right away or sticking with the sellers and following up.
Danny Johnson: That was always one of the things for me too is like you see my phone ringing, I’m busy doing something and the question that always goes through my mind is, if I don’t pick it up and it’s the tenth one, it’s the deal, like I’ve gone through 10 other leads and this is the deal, I don’t want to miss the deal and have to go through another 10 leads and so I’d always pick it up because you never know which call is going to be the call with the super homerun deal. So if you miss the call, you could have missed the super homerun.
Kyle Burnett: Right. Exactly. I think a lot of the sellers there, it’s like in this time, in this age, they call everybody that they can and they might go through all their letters and postcards or through all the websites that they can pull up and whoever answers, they might set an appointment and then if you won’t make them an offer that they’re interested in, they don’t even wait on somebody else. So it’s kind of the first person there has all the pull.
Danny Johnson: So do you try to set the appointment up like the same day and as soon as you can?
Kyle Burnett: If I can, I’ll try and set it up that same day or at least the next day if possible. Obviously that’s not always feasible but yeah, if I don’t have anything going on that afternoon or I can squeeze them in somewhere, I’ll ask them to meet me in an hour or two if they can.
Danny Johnson: Yeah. And you know people aren’t going to keep calling people if they know that you’re going to be meeting them an hour.
Kyle Burnett: Right. I think probably once they have somebody that they think is going to buy their house and it seems like it’s a decent guy and they have that appointment set, I think a lot of these people are like, “Okay, I’m pretty good,” and they’re not continuing down that list of people to call.
Danny Johnson: Yeah. Well, it’s been great. It’s been great hearing about your making it through from last year to this year and all the changes and what’s worked for you and everything. So I really appreciate you being on the show. Is there anything you want to share with the audience before we close out?
Kyle Burnett: No. My advice is just to keep doing it and don’t get frustrated if you don’t get one deal in a month. You just keep moving forward.
Danny Johnson: That’s good advice. If anybody out there wants to get in touch with you, is there a way for them to contact you?
Kyle Burnett: Yeah, you can email me at [email protected].
Danny Johnson: Awesome. Well thanks again, Kyle, and stay in touch. I’d like to hear about your success through the rest of the year and make sure that you hit that goal this year.
Kyle Burnett: Definitely I will. Thanks, Danny.
Danny Johnson: Alright. Have a good one. [music]
