Table of Contents - Marketing for Massive Deal Flow with Michael Quarles
Dave Debeau [00:00:09] But hey, everyone, this is Dave Debeau. Welcome to another episode of the Property Profits Real Estate podcast today. It's my pleasure to be interviewing a fellow real estate entrepreneur and entrepreneur of all stripes. Have lots of experience all the way from Bakersfield, California, Michael Quarles. How are you doing today, Michael? I'm doing great. Thanks for having me on. It's my pleasure. So the first time I'm meeting Michael, but I've known of Michael and is very, very cool real estate marketing stuff for quite some time. So looking forward to chatting about that. But before we dove into that, Michael, why don't you tell us a little bit about yourself and your background and how you got into real estate investing in the first place.
Michael Quarles [00:00:50] Oh, fantastic. I have been in the real estate business since I was an adult teenager. I'm no longer a teenager. Fifty eight years young. And I was waiting for my enlisted date into the US Air Force. It was a summer. My only date was in November. I was bored, didn't know what to do. Didn't have a lot of things to do. I opened up the newspaper one day and I was going through the classified section. And for people that don't know what the newspaper was, it was something we read to look up and get our information, news, daily news, that kind of thing. Well, there is this ad by a century twenty one broker for an hour too long. Now keep in mind I'm an adult teenager. Have no clue what an articulate was.
Dave Debeau [00:01:35] I clue what an adult teenager is. I don't think I was an adult till about 30,
Michael Quarles [00:01:41] 18, 19, you know, and then we turned 20. We're no longer the teen got it. And so for some reason, I called this man and I said, what is an hour too late? And he says, well, that you can build a building every three thousand square feet of the lot. A lot was a little over six thousand square feet back in my head. I could build a duplex. I had never done this before. By the way, I was an indentured servant to my family. I worked in the construction business for my father, so I knew a hammer in the mail was I knew which end to hit it with. But I had never done that, however, I decided to go ahead and buy this lot, didn't realize what a deposit check was, but I wrote one and didn't know that you couldn't start working on a piece of property until you owned it. But I did it anyway. And I fell in love with dirt that summer. There was something about we boys, or at least from my perspective as a boy, I always played in the dirt. I always like the dirt, but I didn't understand what the dirt could do for me. But I fell in love with dirt that summer. I called my recruiter up and I asked him if I could not show up for unless he than a couple of pieces of paper. And from that day on, I have bought and sold a lot of pieces of property.
Dave Debeau [00:02:51] Very, very cool. So what what has been or what is your major focus, your major strategy that you focus on for investing?
Michael Quarles [00:03:00] Well, in the beginning, it was buying land and building something on it. And then way back in those days, permits were a couple of hundred dollars worth in today's day there, twenty five thousand thirty five thousand forty five thousand for the same permit. So it turned from buying land and building to buying our existing property that had a building on it and converting it into a better piece of property. And then it turned into so that was rehabbing. And then it turned and I coined the phrase a few years ago, hoteling. So I went from buying something that needed to be fixed up at a discount and selling it after being fixed up. So every. To buying it, and it needs a lot of work and I am selling it to someone who wants to do all that work, I'm not home selling it, so I'm not discounting the sell. I'm telling it I'm selling at 100 cents on the dollar to someone who's going to take that puts and sweat equity into it and then resell it or keep it as a rental for themselves. And I'm OK because I'm buying it. Sixty five cents on the dollar. I'm not buying. And now I'm not painting doors. I'm not paying walls, I'm not fixing the roof. I'm not doing anything to the building except selling.
Dave Debeau [00:04:15] So why is the end buyer buying from you versus from another wholesaler?
Michael Quarles [00:04:21] Well, the buyer think about this. The buyers in my my league are much like the guys and gals that buy Oreos, bank foreclosed properties that need a lot of attention. Right. And they can't find their property. So they call a real estate professional and they say, I want to buy a rental or a house that I can rehab, turn it into a rental, the real estate agent looks into the portfolio and they see my house. That's undervalued in comparison to the marketplace, because the marketplace is really not as is. Right, right, right. They look at this when they say, hey, this one needs a lot of work. It's price, just like the areas that are hard to find nowadays. And they're cash buyers because that's what America needs as a cash buyer. So I pay my real estate agent seven percent, I don't care, I'm making thirty five after seven percent gone. I know I'm making twenty eight, so plus the cost of buying and selling. So I don't mind that and I'm not doing anything and I can turn my dollar. What's nice about this program is I'm not allowing a lot of cash now currently all close simultaneously. And they said you can't do that anymore, but I do it all the time. Sometimes I'll bring cash to the table because my purchase date and my resell date don't align correctly, so I need to own it. So in those cases I just pay for it. But if you've been around this business a long time and have done enough houses, you have a little little reservoir of cash over there that you can play with now. But I like the model because I don't you know, I like Home Depot, but I don't need to go there anymore. I was going there, so
Dave Debeau [00:05:55] he ended up swinging hammers.
Michael Quarles [00:05:56] Yeah, yeah. But when you when you go to those places and they ask you where they put the things, you've been there too many times.
Dave Debeau [00:06:04] All right. Well, that's very, very cool, Michael. Now, let's switch gears and let's talk about something that I'm always very interested in and excited about that that's the wonderful world of marketing
Michael Quarles [00:06:17] is a wonderful world. It's harder today and easier today than it's ever been.
Dave Debeau [00:06:23] OK, so first of all, just give us a very, very brief 30 second overview of how the heck did you figure out marketing when it came to finding deals? When did that light bulb up?
Michael Quarles [00:06:37] In 30 seconds or less. That light bulb came on when someone asked me in abundance how it was doing so many deals and I realized I must have been doing something right. Yeah. I thought everybody that was a real estate investor had a real estate investment business card that they were doing one hundred dollars a year. I didn't realize the amount of business cards held by people that had never done a deal until I went down to a conference of first boot camp I ever went to. It was like fifty thousand people went there for the weekend. It was the Living Learning Center in L.A. and I was sitting around a round table and someone asked me how many deals like that? And it was in March. So it was a little early in the year. And I said, Well, I've done eighty three and you did eighty three houses in your entire lifetime, and that's this year. And they asked me how I did it and I said I started laying out all the things I did to find the opportunity. And this opportunity is hard to do, are hard to find. You just have to be consistent and know what you're doing and then keep doing it and systemize yourself. You do it on purpose.
Dave Debeau [00:07:39] OK, well, that's that's perfect. You've been around the game for a long time, so if you don't mind, share with us what you were doing then and then how that's morphed into what you're doing now or what you're doing now, that's different.
Michael Quarles [00:07:52] Well, it's more it's different today because we have a lot of digital media at our fingertips. Yeah. Way back in the day, we had newspapers. I was doing a full spread. The full front page of a certain page in the newspaper every Sunday cost me five grand every time I did. It scares the You-Know-What out of someone when they do it for the first time until the phone blows up. But we don't use newspapers anymore. Right. So you can't advertise in the newspaper. There's no one knows that is. Did a lot of TV, lot of TV, TV works, great infomercials weren't great, however, most investors can afford to enter that market because it's too costly. A TV spot cost me about nine hundred bucks, but it's about three hundred dollars to run every time it shows up on the TV. So I've got to be really careful. Of course, then we do all the things like cold calling and networking and everybody we know. We should let them know that we're a real estate professional. But the key for me was direct mail because direct mail allowed me to introduce myself to the person I could buy from where TV and newspaper and some of the other market availabilities. They don't give us the consumer we need. They give us all of the consumers, you know, much like a bandit sign of a Barnetts. I can get a call that's a motivated seller. But that seller could be upside down, doesn't have the thirty five percent equity that I need to be able to buy their house to resell it for profit. Right. That I know I can pull a list and I can ask that list provider, show me all the houses that have thirty five percent or more equity, me all the houses that have a seller or an owner that's owned it for five years or longer. Make sure it's under medium value for my area. I want it single family. I don't want to trust owner or corporate owned property because that's too much like me and I can't buy from myself. Yeah. And I can get that list and I can send that prospect various pieces of mail, and I know when they call me, they're a prospect I can buy from and I know everybody that calls me, even the people that they take me off your list, they will sell their house at some point in the future. It will be while they're alive or while they're dead. But that house will change hands. I want to have the opportunity to be there. So I'm going to grab that phone number, that name, and I'm going to on purpose, market back to them. And we we know that 80 percent of our vehicles come from follow up. I mean, we're kidding ourselves if we think that all of our vehicles are going to come from the first inbound phone call. Right. It's not it's not how our games play it. I mean, I didn't marry my wife the first time I met her. I took her out a couple more times. And that's how society is run. We have to get used to something before we buy or sell or sell our house to it right now.
Dave Debeau [00:10:28] That makes sense. So is direct mail, you know, nowadays and in the days of Google ads and Facebook ads and online stuff and all that stuff, is direct mail still working well for you?
Michael Quarles [00:10:40] It works well for me, but it's not the only thing I would suggest someone do. OK, I think we would be kidding ourselves if we put all of our eggs in one basket because the moment that basket breaks, all of our eggs spill now. Right? I like Facebook. I like Facebook because half of the people need a realtor. They don't qualify. They don't have enough equity. They're motivated, but they don't have enough equity to share with me. But from a realtor perspective, that's great. So if I was a realtor, I'm a broker in California, but I'm not for hire broker. But if I was a broker, what I'd be doing Facebook ads like crazy. The problem with the 50 percent that I can buy from only 50 percent of those are qualified for whatever reason, some of them are looking lose. They still have their phone numbers. So I'm still going to follow up with the twenty five percent that are retaining. Those are pretty good sellers. But I can't just do Facebook, also do TV, TV. These are great. The people that come to me via my infomercials and the commercials are outstanding prospects because I get to tell a story that's based on emotion, which is what a TV commercial is. And I love those. I like Google ads, but I stop doing a lot or putting a lot of money in Google ads, mainly because I don't want to compete with the big boys that are doing it nationwide as a lead source for realtors or other investors. If I was buying nationwide and I was for a while, I was competing in that arena. It's been twenty one thousand dollars a month on Google ads and I still have pretty good placement in all the big cities, but I'm not spending that now. And Google wants to take the twenty one thousand from someone who will spend it. That's not my local budget, right? I like direct mail the best because I can turn it on and turn it off much like the other ones. But I know when that prospect calls me, they're qualified. That's the key to this game, I think is. A lot of people will ask the seller the address before they make sure the sellers are qualified. Sell it like I never do that. I always make sure the seller is qualified to sell me and they're motivated to sell me and then understand they have to sell it to me at a discount before I ask them how many bedrooms they have in the house. I don't really care, but the moment I know I have a qualified seller who's willing to discount their property, then we could start the dance. And I think it's simple. It's that simple. The idea is you have to have an abundance. Most investors have a problem that they live through is they don't have an abundance. So they start sharpening their pencils and the deals get really skinny. Look, they have 15 opportunities a day. Take the best one of those 15 and do that. Yeah, you only get one every other day maybe. And so they're really getting tight on their deals. And we see that in the marketplace where I'm going up and up against another investor. And the seller says, well, this guy will he'll buy it for twenty five thousand dollars more. I always tell the seller I'll be back because most of the time I will, because the guy is the guy that offered twenty five thousand more than I can. Doesn't know what they're doing. And they're wholesaling and they won't be able to find a buyer at that value. So I'm going to follow up with the seller because I get a lot of contracts on second on that flow of I'll call you in three weeks when you find out that deals are going to go sideways. And I'm also, I'm honest, my contract, in fact, get this, that my contract says I'm going to make a huge amount of money buying and selling your house. Bolaven It's the biggest word on the page. My contract says today as soon as we sign this agreement, I'm going to start marketing your house for profit. I'm going to put it on multiple listing service you can have for sale, sign up your front yard. People ask me all the time like, why would a seller allow you to buy the house at a discount? If they could just listed on the on the open the listing service themselves and then the answer to that is because I'm guaranteeing them a piece of my money on the day of their choice, the multiple listing service doesn't give me that guarantee. Nice. So that guarantees worth it for people. And I bought houses from judges and I bought houses from people that they sent to prison. And the common denominator for both people of people is they need my money more than they need the value of that house. And I don't indeed think.
Dave Debeau [00:14:44] Faster rather than an uncertain thing. Who knows what
Michael Quarles [00:14:48] the reality is, is when you list your house with a realtor and you find a buyer. Another realtor finds a buyer that buyer hires an inspector is going to go out and write a three inch book about how bad that house is. I'm not doing it. I don't care. I'm buying as is. And there's value in it when we place and we're able to communicate to a seller our value to them, although we're reducing the value of their property, when we do that correctly, they open up and there they agree. And we have to we have to do this in a way that allows them to sell our presentation to their best friend. Because you and I were friends and I just signed a contract with Michael or sixty five cents on the dollar and you and I having a beer, you're going to call me an idiot or you are going to do something even worse. You're going to say, I'll give you 70 cents on the dollar and you're going to try to get out of that agreement that you signed with me unless you can convince or tell the story I told you, which is true of why there's advantages of selling or selling your house to me. But and so we treat everybody fairly. In fact, my agreement also says your house has to appraise for X value, even though I'm not buying it for that value. So I believe in being honest with sellers. I have no problem when when I bought when I bought the house from the Superior Court judge says, Mike, I can't believe people actually signed this agreement. I said, they do, Your Honor, please sign here and sign their
Dave Debeau [00:16:16] love it, love it. Love it. Right. So. It sounds I mean, you got a lot of stuff on the go. We haven't had a chance. We're just kind of scraping the tip of the iceberg sort of thing.
Michael Quarles [00:16:27] So I love it if people aren't passionate about what they do and, like, go find something else to do. Yeah.
Dave Debeau [00:16:35] So we're probably going to have to have you on the show again just to get to get a little further along the iceberg there. But I got a question for you. So you're busy guy. You're running multiple businesses. You're not just doing real estate investing. Got lots of stuff on the go. You've got podcasts, you've got the whole thing. Are you the guy on the phone? I mean, because it sounds like you're generating a ton of prospective business on the phone. You got that outsourced.
Michael Quarles [00:17:00] We outsource it. But here's the reality of it. We have what we call Alix's, Ryans and Angels. So an Alex is a person who's never bought a house for themselves. They're not a real estate investor. There's someone that sits in a seat and asks a series of questions and it's all scripted. My scripts are sixty two pages long. Or if you say read, I have to have the script for the answer and read. If you say blue, I have to have the blue script. Once an Alex gets an appointment, it goes to Orion, which is second level, who then can go and make an offer. If the offer that Ryan makes isn't accepted, it goes to the angel stage, who can then start not making reduced offers, but then making offers that are better for the seller because cash is at sixty five cents. Don't share the secret that anybody gave, but all by any piece of property at one hundred percent value with zero interest, one pay three hundred and sixty months in the future. There you go. Yeah. And so the angels start looking at terms and the terms allow us to increase the value we're willing to buy the property for. But inside of that value also gives us back what the cash discount got. It makes any sense for anybody, but
Dave Debeau [00:18:16] I get what I get what you're going to come from. All right. So so when you actually are you ever talking to anybody anymore where you got that all outsourced?
Michael Quarles [00:18:23] Pretty much every once in a while. A real estate used to be romantic. Know like I care where the front door was and where the bedrooms on the west, to the east, to the south or whatever, know, front doors or front doors. Garage doors are what I get excited about, about real estate is every time I buy and sell a house, I make twenty seven thousand dollars on average. That's all I care about. And I know I can do that as many times as I want it. Nice. My Alix's are there just to serve people. The reason they're Alix's, by the way, because Alex is a boy or girl's name. Ryan's a boy or a girl's name. Angel's lawyer. Girl's name. There you go. My mark and he goes out. It says, call Alex, answers the phone,
Dave Debeau [00:19:05] whatever Alex's name is or whatever. Alex the sex is, it doesn't matter.
Michael Quarles [00:19:09] That's right. And they ask questions. And when you get it to the point where you remove yourself from being emotional. You can get better deals done, what I mean by that is I can do a full appraisal. I absolutely am licensed to do an appraisal. I will never use property I buy because that's my emotion. Right? So I'm going to go out there and spend four hundred dollars worth on someone to go and give me an appraisal on a piece of property. I'm going to hire a BPL agent. I'm going to hire a home inspector, give me a home inspection with a thousand dollars. I'm going to spend plus the prelim. I know everything I know to make sure that the value which I placed on the property in the first place and the value I'm paying for it causes profit and I'm fine with it. So I don't need to see front doors. I need to see seller sellers don't need to see me. Now, we've been taught by you've created a business.
Dave Debeau [00:19:59] You create a real business that doesn't require you. Right. That's that's what this is all about. Michael, if people want to find out more about you and all the cool stuff that you do, and I know we haven't even had a chance to really scrape the surface here, but
Michael Quarles [00:20:13] we'll have to have you always are great. I love them. If they can go to yellow letters, dot com, which is the source of marketing, shoot me a phone call. You'll pick, phone and call and say, hey, how can we help you? If you guys want to have an on purpose business, you have to start somewhere. You have to start with market perfect
Dave Debeau [00:20:34] words of wisdom. Thank you very much. I appreciate having you on the show.
Michael Quarles [00:20:37] Thanks for having me. This is fun.
Dave Debeau [00:20:38] All right, everybody, take care. We'll talk to you on the next episode of. Well, thanks very much for checking out the property profits podcast and you like what we're doing here. Please head on over to iTunes, subscribe read us and leave us to review it. Very, very much appreciated. And if you're looking to create a regular flow of inbound investor inquiries about your real estate deals, then I invite you to attend one of my upcoming live online demonstrations. And you can check that out at Investor Attraction Demo Dotcom. Take care.