Brett Snodgrass is an awesome real estate investor in Indianapolis, IN. He’s been a full time real estate wholesaler for about 10 years now, and it has been an incredible business that God has used to provide for him and his family. He’s a simple guy, He loves taking his little beater-boat out on the lake, spending time with his wife and kids and enjoying the relationships he has around him.
Today, Brett shared with us his direct mail strategy where he sends out over 20,000 pieces per month and landing roughly 10 deals.
What I enjoyed was the discussion on getting leads from HUD. He’s landing tons of HUD deals. HUD stands for Housing and Urban Development and they are responsible for selling off FHA foreclosures.
HUD sells there homes auction style through the HUD Home Store (hudhomestore.com). You can bid on these houses and land some awesome deals.
Brett shares with us his exact system for making offers on these HUD houses. I especially like how he describes his filtering process to make sure that he’s not wasting his time. This is information that took him months to determine and we get to listen in and save all that time and effort.
Brett knows how to buy houses from HUD, HUD foreclosures. His system for buying they HUD homes is awesome, from offering 25% of list price and just fishing for counters to knowing when they are more likely to accept an offer, it’s all here in this episode.
Learn how to buy houses from HUD with this episode where I interview Brett Snodgrass.
This is my simple request: If you enjoy the podcast and look forward to hearing a lot more episodes, I would be very grateful, happy, beholden and otherwise indebted to you to rate and review the podcast on iTunes.
It’s your choice and I do not want you to feel at all obligated. But I’d love it if you would subscribe and leave a rating and review.
Ratings and reviews allow the podcast to be seen by more people, which will help me achieve my goal of helping as many others as we can to get started in the house flipping business and change their lives.
Click here to rate and review our podcast! :)
Not sure how to leave a rating and review? Click here to view the instructions (it only takes 2 minutes)
There will be a brand new episode every single week, so be sure to subscribe and receive each episode as it’s released.
Subscribe on iTunes Subscribe on Stitcher
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 interview, strategies, stories and motivations 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.
Alright. We got a great episode today with Brett Snodgrass of Simple Wholesaling.com. They’ve got a great podcast and we will talk about some marketing stuff he’s doing. He’s doing direct mail and then buying from HUD, so he’s buying HUD foreclosures through their website and doing a great job of it and I think he said he did three deals just from that over this last month and so definitely something to look into. He shares all the details. It’s going to be a great episode. I’m glad you guys tuned in today to listen to this podcast episode, then we’re going to talk a little bit about the strategy and system for buying houses online as well. Enjoy the show.
Danny Johnson: Okay. Hey Brett thanks for being on show.
Brett Snodgrass: Hay Danny. Thank you so much for having me. Super stoked and juiced up to be on Flipping Junkie, not literally juiced but—
Danny Johnson: We all know. We talked before the show. We know what’s going on.
Brett Snodgrass: Yeah. Ken.
Danny Johnson: We had a lot of trouble getting this recording going. So I just want to thank you Brett for being patient. It seems like little things happen and he was very cool about it. It has now been probably about 45 minutes since we were supposed to get started, so thanks for being patient.
Brett Snodgrass: No problem. Hopefully you don’t mind my muscle shirt. Our AC actually went out in our office, so it’s like 95 in here right now. So I just figured I would pop out the guns for the show.
Danny Johnson: That’s awesome. So do you want to give a little bit of background? I mean, you’ve got the Simple Wholesaling Podcast which is awesome. Everybody ought to check it out. Do you want to give a little bit of background about how you got started and why you got started flipping houses and wholesaling?
Brett Snodgrass: Yeah definitely. I started out nine years ago and I’ve always been kind of an entrepreneur. I bought and sold pretty much anything. I started buying and selling candy in junior high. I would buy and sell cars when I’m in my early 20s, buy and sell stereo systems DVD or whatever I could buy and sell. I have always just had that inside of me. But my parents were both teachers so I didn’t know what to do with my life, so I decided I was going to become a teacher so that’s what I went to college for and it only lasted about four months when I get out of college I said, “Man, this just isn’t for me.” I love entrepreneurship and I never really had a real job. I’ve never went into an interview, never put in a resume. I just kind of started from the get-go, just this entrepreneurial thing. Obviously I started reading books and I’m sure you guys talked a lot about Rich Dad, Poor Dad, I read The Millionaire Next Door, read The Millionaire Real Estate Investor, all these different books. I was like, “Man, these guys are making a lot of money through real estate” and like, man, these wealthy people, a lot of it just came through passive income or whatever and so I said, “I need to check this stuff out.” I didn’t know what I was doing, but during that time we all knew that the market was starting to tank. This was like the end of 2007 or so. And I didn’t realize and I saw these cheap properties online in my very first property I saw in Youngstown, Ohio and I didn’t know anything about Youngstown, Ohio but I saw that you could actually buy a house for $9,000. I was like, “No, that can’t be possible.” You can actually buy a frame and a roof and bathrooms and kitchen for $9,000. I mean I couldn’t even build a deck for $9,000. But I did it and I bought this house, sight unseen, I drove. I’m from Indianapolis so I drove six hours one way to go visit this house and cleaned it up. But I only had $10,000 to name – actually, I only had $5,000 and my dad $5,000 so I pulled him in and I said, “Dad, we’re going to buy this house for $9,000. Let’s do it.” He’s like, “Oh, whatever. I want to retire anyways.” And so we pulled it in but we only had $1,000 dollars left after we bought this house so what are we going to do? So then we just marketed it and sold it to another investor and that’s when we started this whole wholesaling thing. Again, I didn’t even know what we were doing. I didn’t know there was a term for what we were doing. I called it buying a house and selling it fast because I don’t have any money to fix it up. That’s kind of how it got started. We did it with one house. We ended up selling the house for $15,000 so we made $6,000 and I said, “Man, what is this? If we can do it with one, can we do it with a hundred?” And that’s kind of how it all got started.
Danny Johnson: Awesome. So what kind of profit did you make on that first one?
Brett Snodgrass: We bought it for $9,000 and we sold it for $15,000 and I was used to being honestly a substitute schoolteacher and I was making $13,000 a year. And I could make $6,000 on one deal, I’m like, “Dude, that’s like half my salary. What is this?”
Danny Johnson: Yeah. You can take six months off now.
Brett Snodgrass: Yeah. I’m going on a vacation man.
Danny Johnson: Yeah, that’s awesome. So what we wanted to talk about today was we’re in the middle of the series where we’re talking about marketing and we’ve done a lot of episodes on direct mail because that’s what a lot of people are doing. Just real quick, are you doing direct mail? What kind of direct mail are you doing?
Brett Snodgrass: Yes. So people always ask this whole direct mail came to me just a couple of years ago and this guy he says, “Hey, we could try this direct mail thing out.” And at that time it was just me and then I hired one assistant. And this assistant, I didn’t have much for him to do so I said, “Why don’t you try writing these letters? I hear people are like mailing out these letters and people call them. I don’t know if it works, but let’s try it.” He was actually handwriting all of our letters and then, I didn’t know, I just bought lists off of the main websites ListSource, we also used AgentPro, 24/7.com trying to find people delinquent their taxes or whatever. We just started doing that and that’s how we got started. We were only doing 250 letters a week and because you can write them all, so we could do that many and then and then it started working. I was like, “Oh my gosh, what is going on?” We would spend $1,000 and we would make $6,000 off of the deals. So I was like, “Okay, spend a thousand make six, then a thousand make six, what if we ramp this up to 10,000 letters a month? What if we ramp it up to 20,000 letters a month?” And actually that’s what we’re doing now. We use just a direct mail company here in Indianapolis. I’ve tried some of the other online companies but I realized I love it when it’s stamped from Indianapolis and it’s not stamped from Las Vegas or California. I found a guy here locally and I said here’s what I want to do and he said I’m one of his best customers. He said he didn’t anybody else send out 20,000 pieces a month and that’s what we do and that’s why we ramp it up.
Danny Johnson: Are you guys getting – is it a meter, is there a live stamp on there? What’s the—
Brett Snodgrass: I’ve tried it both ways. Obviously we save a lot of money if it’s metered so this last batch we send out like a wedding invitation, yellow letter, looks like a wedding, someone getting invited, but it’s metered so it really doesn’t look like you’re getting invited to your boss’s wedding.
Danny Johnson: It was like a carton side too or is it still letters.
Brett Snodgrass: There’s a postcard basically just a yellow letter type of postcard and we just say “We want to buy your house, call us. My guy’s name is Alex.” And then we’re send out 20,000 letters like that and we’ll get about 500-600 phone calls and then those will be like 300 leads that we’ll put in and then right now we’re doing about 15 deals a month I’d say. But they’re not all from there but I’d say from direct mail we’re doing about maybe ten deals a month I’d say right now. So that’s the direct mail for you.
Danny Johnson: Yeah. So if you’ve got a list that big and your market – what’s the size your market about roughly?
Brett Snodgrass: We do Indianapolis. We’ve got 1.8 million people here. People ask, what list do you send to? I’ve tried a lot of different things. I’ve tried the absentee owners. I’ve tried delinquent tax people. But I’ve always found that people – somebody asked me the other dayya and I was like, “Who do you mail to?” I don’t want to be politically obviously but I said, “I mail the old people” And he’s like, “You mail to old people?” And I was like, “Yeah. It just seems like most of our houses from older people, people over 55 or 60.” So actually we try to target people over 55 or 60 and that’s kind of what we do. We even stopped absentee owners. Now we’re trying even home owners and people over 55 years old.
Danny Johnson: Yeah, because they mostly have the equity. So do you also filter by equity or you just leave it at age alone?
Brett Snodgrass: I do filter. I do about 50%, probably some other people because we buy cash. We don’t get in the subject to’s or any type of stuff like that so to make it simpler, we need their equity in their. If somebody says, “Oh $100,000 ___ 90” it just doesn’t make sense.
Danny Johnson: Yeah. It eats up all you guys’ time too if you’re taking calls from people that have – there’s no way that you can buy their house and they’re just eating up your time. So the response from your direct mail seems pretty good and you said you you’re doing about ten – so you’re able to find a list of 20,000 so that’s basically blanketed the whole city. You’re targeting every area in the city?
Brett Snodgrass: Pretty much. It is hard. You get to a certain point where you’re like, “Man, I can’t mail out anymore. I’m going to mail to the same people every week.” So this time we got 26,000 people on our list and we did blanketed the whole city kind of over 55 years old is kind of what we did and I don’t know if we blanketed the whole city. I think we picked up certain zip codes. Once you start narrowing it down to absentee owners, over 55, 50% equity you only get 5,000 people or 6,000. So we said okay if we want to scale, we have to do this like this. We just want to be Indianapolis or we have to maybe to go a different market, I don’t know. I’m not in that kind of stage.
Danny Johnson: Yeah, yeah. And how many times are you mailing those people? What’s the interval?
Brett Snodgrass: Yeah. So pretty much we do we do about 5,000 a week because we only have one guy that takes all the calls and he can only handle us mailing 5,000 letters a week. And then we would just mail to one list in January, in February mail to a different list and then March we’ll mail to the same January people – so every other month we’re basically hitting those people. So we have two lists and then every other month or more and then sometimes we’ll start off with the yellow letter, then next month will be a postcard, next month we’ll do a typed letter like an office letter, next month we’ll do a different postcard. We just kind of hit it like that, so it will be different things.
Danny Johnson: Yeah, I think that’s smart because then you’re getting people that respond to different types – so if you always do the yellow letter or the personal thing, you’re missing out on the people that feel like there is no credibility there. Are you a real deal or are you some kind of scammer kind of thing.
Brett Snodgrass: Yeah, definitely.
Danny Johnson: Awesome. Before the show we talked a little bit about where you were getting your leads and deals from and you said that you were in some HUD houses. Would you mind talking about what your process is for that?
Brett Snodgrass: Yeah, definitely. So when I first got started, the market was a lot different and I didn’t know anything about direct mail. And all we did was MLS offers. I’m getting ready to give this presentation this Saturday on the top ten ways to find deals okay. Some people I believe that if you use any of these strategies you can build a great business if you just do direct mail or if you just do MLS offers or you just do HUD deals. But with where we want to go and how we want to scale, our goal was to do 20 properties a month and so we got to find different lead sources to fill our tunnel. So if we’re doing 20 deals a month like, I got a sheet right now I’m looking at, our last 50 deals I pulled them up, 46% came from direct mail. So that’s our bread and butter. That where it’s at. We have a lead generation website that we got five deals from. HUD deals, we got three deals out of those 50 from HUD. We got six deals for making offers through the MLS. When you’re trying to scale to that amount, you need more deals to fill your funnel and I have always been a huge component of HUD. I love HUD. If you talk to any other agent they’ll probably say, “I hate HUD because it’s so tedious” and it’s so time consuming but I say it’s only time consuming if you get a deal accepted and if you get a great deal accepted I’m going to want it because it’s worth the time. Do it. So basically with HUD, we have a system set up and a played trial and error and just a lot of different things. Basically we have a spreadsheet and we have all the houses listed in Indiana at the HUD house. So right now you go to hudhomestore.com which is HUD’s website and you type in Indianapolis, there might be 200 houses for sale in Indianapolis. Now some of those are going to be owner-occupied so you can’t even bid on them as an investor, so maybe that eliminates 60 of them, now you’re down to 140 and then I have an agent my office and we basically monitor our HUD deals. So we have a spreadsheet and you can import them directly from the hudhomestore to a spreadsheet. It will have the property address and have the list price and then it has our offer price. So we basically have a system set up and then I tell my agent, I say, “Look I want you to offer 25% of the list price on every HUD property, okay?” So they do that. Now are we going to get accepted? No, Maybe one out of a thousand, but it pretty much puts it on the system on the hudhomestore in spreadsheet so that we can start monitoring it because HUD has some algorithm formula where every day they’re going to start countering your offers even if they’re asking you $100,000 and you offer them $25,000 the next day they’re going to counter your offer. That’s what I’m looking for. I’m looking for what is HUD going to counter me at. And then sometimes it’s usually 80% of what they’re asking. But what we do is we start monitoring that and then I know that we start monitoring the days in the market and I know that once it gets about 90 days on the market, HUD starts getting a little antsy. They starting to get a little motivated and then we start looking and we start checking the counts. We start analyzing the deals and we take that 25% now we may up that 50% of what they’re asking just depending on where we need to be at. And then our broker takes them and she puts in offers every single day. Now are you going to get a bunch accepted? No. We’re putting in 50, 60, 70 offers a day and like I said over the last 50 years that we did, we got three HUD deals and those are going to make us money. It’s just another it’s just another system to add to your funnel of deals which I think doesn’t take a lot of time. I can literally put in a HUD offer in two minutes because it’s all on the computer. You put in your name, your offer price and it’s not like you’re writing a bunch of forms so it doesn’t take long. So we can put in 50 HUD offers in two three hours.
Danny Johnson: Yeah. And I think if you look at it in terms of ten deals from direct mail doing over 20,000 pieces, all those calls that you got to take, all the analysis versus that and getting three, there’s probably less time in that for the three than there was in three of the direct mail.
Brett Snodgrass: Yeah. Definitely it is. And if you have an agent your office obviously if you just hire some agent they’re probably not going to want to put in 50 HUD offers a day.
Danny Johnson: Do you incentivize that somehow with them?
Brett Snodgrass: Usually we give them on the accepted deals, we might give them like half of the commission because you get commission back to you and then we’ll also pay and like a base, like an hourly rate, and usually it takes them about an hour a day. That’s pretty much it. So wherever you want to pay them base, you just take that times $15 an hour or $20 bucks an hour or something like that and then they get that base and we also give them half of the commission on the accepted deals is how we do it.
Danny Johnson: Nice. So okay, you have that spreadsheet, right? I’m just going to recap just to make sure I got this right – so you got the spreadsheet you’ve got all the ones that allow investor offers. Sometimes HUD they have the words “only home owner occupants” or “teachers” and stuff like that can bet on them first and then they fall into the category where anybody can and can bet on them. So you make sure that you can bid on them as an investor because you’re not going to live in the house and then you put out offers of 25% of the asking price.
Brett Snodgrass: That’s what we do. And the only reason why we do that is to get HUD’s counter because they have a computer algorithm that they counter you every day on your office. I don’t really care what they’re asking is, I just want to know what their counter is because that gives me where I went and I really to be and then I can take that 25% and then I can analyze the deal and then move it up.
Danny Johnson: So at that point you’d probably go out there and actually look at the house if they what they countered at was pretty reasonable.
Brett Snodgrass: If we start getting close yeah. I just looked at one this morning because we were only $5,000 or $6,000 off so I said, “Okay, let’s go check this one out.”
Danny Johnson: Do they still use only certain – are they all on – what are those log boxes called?
Brett Snodgrass: Do they use HUD key?
Danny Johnson: Yeah, yeah.
Brett Snodgrass: Yeah. I mean, there’s definitely a master HUD key out there.
Danny Johnson: There used to be four. It would always rotate between four.
Brett Snodgrass: Yeah. They still do that, I’m obviously a broker can go set up the showing me and check out the house. The one thing I want to mention, we actually changed our formula a little bit because we were putting every offer in on HUD the investors could put in, but they were countering 80 offers and then I was realizing that my agent was taking two to three hours a day to put all those in, but we weren’t getting hardly any of them. So it’s taking a lot of time and I started noticing that we were only getting the ones that HUD started reducing the price okay. So if you go to the HUD home store, they actually have a button that says “price recently reduced.” Okay, so now instead of putting them all in because they know we’re only getting the ones accepted that they start reducing the price so now we only look at the price recently reduced properties and we will just reduce those. All of a sudden it went from 80 properties every day to now like wanting to 20-25, but I realize now like when we’re skimming our HUD spreadsheet, we’re actually getting a lot closer on those and those are the ones that we’re going to try and get anyways because it starts reducing their price and we’re starting to get closer and closer and we started monitoring. So check out the HUD home store on recently reduced properties because for us those are the ones that we get more accepted.
Danny Johnson: That’s an awesome tip. Now you don’t worry though by doing that you’re going to miss the ones where there – well I guess since most of it is automated, it’s not like where you’re going to hit them before right before they’re going to price reduce it anyway because they have a set system like we’re not going to do it unless we do it. So that doesn’t matter so much, right?
Brett Snodgrass: Yeah. And just by doing this for a while, I mean HUD prices them. I mean, I don’t remember when the last time we actually bought a HUD property when they had it priced right their very initial price. We’re monitoring because HUDhas some formula that let’s say they’re asking $100,000 dollars per property. Well they might counter you like I said at 80%. But then let’s say it’s been on the market for a month, now they’ve reduced it from $100,000 to $87,000. Their formula also gets – they’re countering not at 80% but they start lessening that maybe now they’re countering at 75%. We just kind of monitor that and then as soon as they reduce the property we’re checking it out because we know that if it’s a good deal the other investors are going to be jumping on it too. So we’re like the day they reduced the property, we’re like, if we need it, we need to jump on it.
Danny Johnson: Yeah and your wholesaling so do you feel like you’re able to pay more than some other investors because you have a big buyers list that you can market to?
Brett Snodgrass: Obviously, as a wholesaler it’s tough to compete with maybe flippers because that’s who we normally sell to or buy and hold investors. But yeah, I mean I think as we get into this more our buyers this gets bigger and I know the market here very well. I’m a broker so I can check comps very well. If I was in your market in San Antonio and bidding on HUD property, I’d probably won’t be able to compete very well because I don’t really know your market I would be super conservative. We used to do that in Florida HUD properties. I never got one because I don’t know the market very well. I was going way lower than what they probably should have been.
Danny Johnson: You kind of know what your buyers are willing to pay you for the properties already so you already know where you’re going to be, right?
Brett Snodgrass: Yes.
Danny Johnson: And then you’re having to close on these before you sell them like a double close, how are you handling that with wholesaling?
Brett Snodgrass: Yes. Obviously with a HUD property you can’t assign them. You have to double close or a buy and then sell later. Now here at Indiana our prices are probably not and I don’t know what San Antonio prices are Danny but—
Danny Johnson: I think it’s pretty similar actually.
Brett Snodgrass: Is it similar? Okay. I’ve been done this for awhile so obviously I don’t really live a way extravagant life, so a lot of the resources that I’ve made I’m able to buy the properties and sell them later. So yeah we closed all of our HUD properties. We sometimes do double closings with the title companies and we close with our end buyer the same day. But most the time we’ll just buy and then sell. If I can’t buy it myself with my own resources I have private lenders now step in and I have to pay a point or two plus interest, but our average deal right now probably is less than some other wholesalers around the nation because actually I just got back from this mastermind and these guys are talking about they’re making $10,000 or $11,000 average per year. One guy in New York was like $30,000 and I’m like, “What?” The average is crazy. And our average is probably $7,000. So to bring a private lender in, I’ll pay them a point or two points and pay them $1,000 bucks to make that $7,000 so sometimes we get to do that as well.
Danny Johnson: It’s still worth it though, right?
Brett Snodgrass: Yeah.
Danny Johnson: I guess that makes it easier and takes away some of the stress too right? I mean because if you’re dealing with new buyers. And what’s your take on that? I know that’s sort of outside of the marketing thing but with wholesaling, it’s typically like what two schools of thought where you got like a buyer’s list of people that you know exactly what they want and you kind of send the deal straight to them or you have a big buyer’s list and you try to get as much as you can, but you’re taking a risk of having somebody be a little bit flaky. What’s do you guys do?
Brett Snodgrass: Well, I’m kind of changing a little bit because I’ve always been a component where you don’t need a big buyers list. You got five great cash buyers. You get 10 great cash buyers guys and these are guys who want to buy five properties a month or whatever, ten properties a month. I have always treat them well so I said “I’m going to send them my deals first, but then like I said, I go to this mastermind thing and they’re like, “We just have a big open house. We invite all of our investors. They get in this bidding war and we get $10,000 more than what we thought.” I’m like, “Man, that could be a great idea.” So now we’re kind of trying that a little bit because we do want to increase our profit margins a little bit and I realized that a lot of times new buyers will pay a little bit more. It’s kind of like what you do with contractors. At first they’re really really great and they do a really really good job, but then maybe after a while they kind of start slipping a little bit same thing with cash buyers. At first they’re going to pay $50,000 for this property, but then after six months or a year later, maybe that would be down $46,000 now because of your good relationship and they’re like, “C’mon man, we know each other. We hang out.”
Danny Johnson: When they find out that you made $25 on the last one and they still bought it for what they wanted to but that’s irks them a little bit so next time they negotiate more.
Brett Snodgrass: Yeah I actually bought this one deal it was a great area in Indianapolis and Fountain Square and we wholesaled it to this really great investor who we sell a lot of properties to for $42,000 and then I found out my friend knows this other guy who bought that property from this investor and these guys mostly flipped. But they must just wholesaled this because this guy made them an offer. They ended up wholesaling it for $58,000. So to me I’m like, “Wow.” I might have left a lot of money on the table by just thinking “I want to treat these guys well” which you do, but it comes to maybe a certain point because that’s like three deals that we have to do just by marketing it well or something.
Danny Johnson: Yeah. There was one recently that really was like a punch in the gut to me and it sucks because I think I made $50,000 on a wholesale, now we bought it and then turnaround sold it to another investor who then made $50,000 on wholesale without really fixing the place up. It’s so awesome. You should be super pumped about it and I was, but I was curious about it because I was kind of unsure about the ARV and that’s I wholesaled it and then maybe a year later I looked like whatever happened that property and I saw what they fixed it up and sold it for. And it was like over maybe $200-250K more than what I figured for the ARV and I was like “Dude, that could have been like $300,000 deal.” So it was like a punch in the gut but I don’t know what they went through, maybe it wants but whatever. We still made out awesome. I’m not going to complain.
Brett Snodgrass: Yeah, yeah. We did too. You live and learn a little bit, but we’re some trying different strategies now on the selling side like this one I just got and we didn’t price it because this guy said – we didn’t even priced it anymore. He just sent out his contractors and they all show up and investors and they just get a bidding war. So I’m trying that but I don’t know like it’s not going super good. I feel like the response rate people aren’t even making offers because they don’t know what I want and somebody—
Danny Johnson: Oh wow. So they’re not even like throwing an initial price out there.
Brett Snodgrass: They’re not. No. It’s a great area and I’m wondering maybe they’re just flaking out because maybe of the way I word is too, I said “Hey, send us your highest and best offer by Wednesday of this day.”
Danny Johnson: Yeah. I hate that.
Brett Snodgrass: Okay. There’s my mistake. I don’t need to put that.
Danny Johnson: Yeah. Because it feels like MLS, like, “Ah, forget it.” I don’t know. It could be also just the function of the size of the buyer’s list or the number of people you’re reaching. I talked to a friend of mine in Houston said he’s getting 100,000 people on his buyer’s list.
Brett Snodgrass: Yeah. That’s crazy. I don’t know how you get that many people. I don’t have a mega buyers list. We’re on pace to do 140 deals this year or something and I think we only got a thousand people on our buyers list so it’s not crazy.
Danny Johnson: So it’s probably a function of both, like, build that up and find a better way to get people to feel like they’ve got a good chance of getting the property.
Brett Snodgrass: Yeah, yeah.
Danny Johnson: That’s crazy. I hear things like that and it’s probably an awesome idea, but my mind immediately thinks “Too much work, too much work.”
Brett Snodgrass: Yeah. I know.
Danny Johnson: But it’s like if you make double what you would on a wholesale, it’s like doing two wholesales for the one, so really is it more work? Probably not.
Brett Snodgrass: Yeah, definitely. Just trying to figure out different strategies. It is just a game that we’re just trying to do. On the marketing on the other side, I love sending out postcards. Once we get a property, I’ll send out postcards to all the cash buyers in that zip code that bought a property cash in the last year. It has my picture on it, our website, the featured property so we build our cash buyers that way. That’s a great strategy that we’ve definitely tapped into as well.
Danny Johnson: Awesome. Alright so we talked about doing some the direct mail, the HUD properties.
Brett Snodgrass: Yeah pretty much. We have a lead generation website which if I were just getting started, that wouldn’t be my first go-to strategy. I think that takes time. Sometimes I feel like I’m just dumping money down the toilet because I don’t know if it’s working. I don’t know if it’s going to work, but in the last six months, it started off kind of slow. We’ve been only do this for six months, the whole legionary website paying for Google Adwords all that stuff, but we’ve got about five deals out of the last 50 in that way. And to me it’s like you don’t get as many leads but then sometimes you get great leads.
Danny Johnson: Alright and less competition. We do LeadPropeller websites. I offer websites for investors with the LeadPropeller websites and we’re doing the AdWords management and that’s just the strategy recommended. You build up SEO over time because you’re not going to rank immediately especially when people have been doing this for a while already, but you will over time and it’s really sticking with it long enough to let that happen and knowing that there is going to be some work to do that or pay someone to do it. But they AdWords, I mean that first week you could be getting leads, but it’s going to cost you a little bit of money but I think that the cost per deal for me with AdWords is definitely doable for most people that’s why most people do it.
Brett Snodgrass: Yeah, yeah. So we’re doing that. Five deals actually for us came from referrals over the last 50 deals. So these are basically like it’s just get your name out there. I always tell people in San Antonio probably have their REIA meetings. I always say if you’re a wholesaler or a real estate investor if they open up the mic you grab that mic and say “Hey my name is Brett Snodgrass. I’m at Simple Wholesaling.com and maybe give out a property that you have. I don’t know what it is but that’s really helped us because now I get two deals last month from just a guy, an agent, that referred his investor t me that sells properties fast. He lived in the Czech Republic you can’t check on these deals and his this agent didn’t want to take him because they’re not in the greatest areas and he’s going to sell them for $20,000 or $30,000 so there not a very big commission in there so he referred him to us. That’s been a great way, just branding and get your name out there. Obviously that takes time to do and in our last one we just started doing is again we’ve gone back to the MLS and I think it depends on your market, but that’s how I got started. I put in 200 offers to the MLS. We would only get 10 of them. We would use those and we would all wholesale them. So I think that as the market shifts we all know it’s coming and you’re probably going to know faster than what we do because – or maybe but more like I’m watching the California and Phoenix markets and I’m watching that shift because when we killed it was when the market took the huge shift in and we can buy bank-owned REO properties for pennies on a dollar—
Danny Johnson: Most of the competition goes away.
Brett Snodgrass: Yeah. And I’m waiting for that shift and I know what’s coming and midwest is going to have a little bit later but, but we’re getting MLS offers now. I’m putting in 50 offers a month and we got three last month and people might say, “You’re low ballin’” I don’t really consider it low balling. I look at the comps. I analyze a deal and I just got offer them where we need to be at. Most of them are going to say no, but some of them are going to say yes.
Danny Johnson: So we’re doing that mostly from the pictures or are you going to hit them with a certain percentage just to fish for counters.
Brett Snodgrass: I actually have been doing this now so I’ll take 20 properties off of the MLS each Monday and I’ll analyze them and comp them, so they’ll be asking $50,000 for this property and I’ll comp it and I’ll say okay and I just got the pictures and we’ll say we need to be at $24,000. Well, that’s not a very good offer whatever, but some people are going to take it. For example my employee who lives next door to this house had a pretty good area these comps, really great rehab area. There are some for $200,000. This house next door to him goes up and he wants us to buy it because he wants to rehab it because it’s going to help his house. They’re asking $82,000 and he said “Hey, can you put in an offer on this house and it’s listed on the MLS.” I’m like, “$82,000 we usually pay $35,000 for these houses, they’re not going to take that at all.” He’s likke, “Oh c’mo, let’s just try it.” And so he’s agent in our office so like, “Hey, if you want to put in $30,000 let’s do it. I don’t care.” So then they come back and counters at $50,000 my eyes go up and I’m like, “Okay $50,000.”
Danny Johnson: Yeah. There’s definitely motivation there.
Brett Snodgrass: Yeah. So then I just said, “Look just tell them our last offer is 39K.” And they took it. They’re asking for $82,000 we get it for $39,000. We made I think $15,000 or $16,000 on that deal and we wholesaled it, the rehabber they’re going to make a killing on it. And so they’re out there but it takes a lot of work. I thought about the really really great ones. There are like 50 other ones I didn’t tell you about.
Danny Johnson: It’s consuming. That’s better done for somebody to go through and you pay them to do it for you.
Brett Snodgrass: So this just goes back to filling your funnel. Right now our markets are only again 1.8 million people, so we can only do so much with direct mail I think. We can only maybe do so much and spend so much on the website. But if we’re trying to scale this to 20 deals a month, this depends on your personality, it depends on your business. We have to have these strategies in place. Our strategy is 20,000 pieces in direct mail a month. We’re going to up our website now. We’ve been only spending $2,500 a month on our website because I was shaky. I didn’t work but we’re going to up that and we’re going to be putting in 100 MLS offers a month so we’ll probably get three to four deals that way. We’re still going to do our HUD deals, probably get two or three deals that way. So all of this is going to start adding up and filling our funnel of deals and that’s how we do it, but we you got to build systems around it.
Danny Johnson: Yeah and that’s pretty cool and I think for people just getting started is kind of cool to hear that because you’re talking like on terms of scaled up businesses here whereas most people, out of all those things he just said five, ten, three deals here, three deals there, five deals here, you only need one of those per month really. If you’ve got a small operation, you only need really one per month and you got a heck of a living.
Brett Snodgrass: Here’s what I would recommend to your listeners and hopefully they hear me on this and that’s what a guy told me because I was doing about 10 or 12 deals a month and I was trying to scale this thing up and then last month we did a 26 deals on a contract. The acquisition guys really did well and I said, “I think Andy I’ve saturated the market.” I can only do so much. I got to go to a different market and then they ask me, “Ares there other wholesalers in the market?” And I was like, “Yeah.” And he said, “How many deals are they doing?” And I said, “Well, I got this one guy he’s probably 100 deals a year. I got this one guy doing 50. I thinh there’s one guy doing another 60 and I got a lot of people doing 10-20 deals a year.” And he said, “Okay, well you need to be the premier wholesaling company. You need to get some of those deals that they’re getting and what are they doing.” I was like, “Okay, that’s true.” I still got a lot of room here to grow and I don’t have to go to a different market. So go to your market, see how many deals the other wholesalers are doing, what are they doing and just it better than what they do and I think it’s going to work.
Danny Johnson: Yeah. That’s awesome. It’s a lot more work I think to go and open up shop in another location.
Brett Snodgrass: It is yeah. You don’t want spread yourself too thin. You got to get a whole new team and you got to pay attention to your existing team. That’s crazy.
Danny Johnson: So how many people, do you my asking, how many people do you have on your team?
Brett Snodgrass: We pretty much – this all kind of came in the last year, year and a half. I did his business for nine about eight years when it was really it was me. My dad helped me some because was kind of retiring, but now he’s more retired he’s 65 I think. So he doesn’t want to work hard. He’s kind of got one foot in retirement. So pretty much it’s me and then I got five people on my team. I have two acquisitions people. I got one guy that takes all the phone calls and he can handle doing about 5,000 letters a week, and then I got another guy he does all the appointments. So him and the guy who takes the phone calls work together. So the guy takes phone calls and puts them into our CRM software and then the guy with the appointments, the good ones, he’ll go out and look at them and he’ll get them on a contract. So there’s two people. I got a closing coordinator. So he does all of our closings. He deals with the title company because when you’re doing you are 10 deals or 15 deals buying and selling, that’s 30-40 transactions sometimes and I don’t have time to do that anymore. So I got a guy that takes care of all that. And then basically we have, and this is just brand new, we only had one dispositions girl who would sell all of our properties the cash buyers that are in our cash buyers list, but then now Jaren who’s on our podcast, he’s stepping into the role also of the dispositions because we all know that you make money when you buy your property. We all know that. So you can make a lot of money on buying your property, but when I went out to this mastermind group I realized you can still make more money on the sales part of your property. Maybe you can’t make as much on negotiating on the buying you can get up your price by $1,000 a deal, maybe it’s $2,000 or $3,000 and when you spread it over 100 deals or 150 deals like that in a year, $1,000 a deal is $150,000 or $2,000 it’s $200,000. So we are trying to do some strategies that we can do to up our profit margin a little bit and so we’re looking at that as well. So it’s pretty much me and five other people plus we got a couple of Vas and stuff.
Danny Johnson: Yeah, cool. It’s important to streamline every piece. Don’t just focus on trying to generate more leads. I mean if you take what you have coming in already and getting more out of those you don’t need to generate more leads.
Brett Snodgrass: And most people focus on the acquisitions and I think that is the most important but I think for me lot at times they call it this thing the “acquisitions-aholic” it’s like the AA meetings where we focus so much on acquisitions but then we forget about selling them. We forget that the back door. And right now, like I said, we got 26 properties in our contract last month. But now if we could not keep up with that number on getting them sold, we’re generally going to have to slow down because you can’t just buy more than sell every month. So I think focusing on the selling part it can help your profit margin is a little bit as well.
Danny Johnson: That’s awesome. It’s good to hear especially in this part of the series that we’re doing on marketing to understand that we are talking about acquisition side of it, but always keep in mind that your problem with growing might not be getting more and leads, it’s doing more with those leads and then what you’re doing with the deals that you get from there are maximizing profits and always is looking to streamline and make everything more efficient.
So we’re going to go ahead and wrap this up here Brett. Is there a place that – where should people listening go to if they want to get in touch with you or if they want to find out more about what you’re doing and what you teach?
Brett Snodgrass: Yeah, definitely. Well, we have a podcast, it’s Simple Wholesaling Podcast. We’ve just redesigned our websites. Actually I have two websites. We have Simple Wholesaling.com and this is basically like a wholesaling hub kind of like what you do Danny for flippers. We have a lot of blogs. We’re coming out with some simple guides. These are like ebooks on how to assign contracts or how to do double closings or how to do direct mail or whatever. Simple Wholesaling.com is where you can learn a lot about how to wholesale. But then we have our property side which is Simple Wholesaling.properties and that’s where basically we put all of our properties on the website. You can be added to buyers list if you’re looking for properties in Indianapolis. So either site, they’re both interchangeable. You can get to the property site from the Simple Wholesaling.com site. So I would just say check this out at Simple Wholesaling.com and then shoot me an e-mail. I’d really appreciate it.
Danny Johnson: Yeah, very cool. Definitely check out the podcast and he interviewed me with Jaren just before we did this interview. So if you want to hear that you can check that out. Definitely go check out their podcast. You definitely one to subscribe to and pay attention to. There’s a lot of great info.
Brett Snodgrass: Yeah, I appreciate it Danny. You’re awesome. I love to hear about flipping. And I just love everything that you’re doing man and if we can help you any way. I think we can all just collaborate together. Sometimes as wholesalers or flippers sometimes we feel like we’re competing with each other and I’ve realized, “Man, we’re on this together.” You got to have that abundance mindset. There are so many deals out there. There’s no secret to it. Either you’re going to do it or you’re not. I try to be transparent. If you do it and you do it really hard, you’ll do well, but most people won’t and that’s the issue. But thank you so much for all you do man.
Danny Johnson: Oh, thank you. The point you just made about the abundance thing, people hear that and nod their heads and they go and think like there’s people doing so many deals in my markets it’s hard to get in there and you just nodded your head about the abundance thing. You have to believe it because it is true. There’s plenty, there really is plenty to go around.
Brett Snodgrass: Yeah. I’ve seen guys doing a lot of deals and they’re on their own and they’re on the same market. I’m sure I mean I not know many people in San Antonio and I’m sure there are other guys doing deals—
Danny Johnson: No. It’s just me, just me.
Brett Snodgrass: It’s just you.
Danny Johnson: I wish. But there’s plenty. We’re still doing great and all the plans to grow I know there’s room for it. It’s not that I’m going to hit a wall anywhere near where I’m trying to get. So it’s just a matter of saying this is where I want to be and what I need to do to get there and that’s it. It’s as simple as that. That’s the first step right.
Well, thanks a lot Brett. We’ll definitely keep in touch. I really enjoyed the interviews – this one and the one we just had.
Brett Snodgrass: Yeah. Thanks a lot Danny. I wish you the best, man.
Danny Johnson: Okay, have a great day.
Brett Snodgrass: You too.
Wow. didn’t know wholesalers could make this much money. Flippers are already very fast to get the property nowdays.
Speak Your Mind