Marketing Lessons from 1M Spent with Mike Simmons

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Podcast Transcription

Dave Dubeau [00:00:09] Hey, everybody out in property Profits land. This is Dave Dubeau with another episode coming atcha. And have you ever wondered how or what are the best ways these days to find motivated sellers, especially for single family homes? Well, today’s guest, Mr. Mike Simmons, is going to be talking to us all about that. Mike’s got a ton of experience with this. He’s been investing since 2008, you name it. He’s done it when it comes to single family homes, and he’s got his own podcast, among other things. So the Just Start Real Estate podcast, it’s my pleasure to have Mr. Mike Simmons on the episode today. So how are you doing today, Mike?

Mike Simmons [00:00:48] I’m doing great, thank you for having me. I appreciate the nice intro and I’m excited.

Dave Dubeau [00:00:52] I’m excited too, because we’re talking about something that I absolutely love nerding out about not only real estate, but marketing. And when we can combine the two of those, it is a marriage made in heaven for us marketing nerds. So, Mike, why don’t you let’s just jump right in, if you don’t mind, my friend, at the time we’re recording this, we’re late summer 2022. Things are going a little bit crazy with markets, with interest rates, with inflation, with the big R recession on top of everybody’s mind, when I hear all of that stuff, that actually makes me a little bit excited when it comes to especially single family homes. What are your thoughts on that? What do you see in your murky crystal ball as being some of the opportunities coming down the pipeline?

Mike Simmons [00:01:42] Well, like you, I interview people on my on my podcast, and I’m lucky enough and fortunate enough to be able to have some pretty heavy hitters on my show who are whose only mission in life is to understand what’s going on, what’s going to happen, what should happen. And I’ve talked to some of the smartest guys in the industry.

Dave Dubeau [00:01:59] And sometimes they’re right.

Mike Simmons [00:02:01] And sometimes they’re right. But I’ll tell you what, the ones that I’ve talked to, they’ll say, you know, we just don’t know for sure. Right. There’s nobody knows for sure. If we all knew for sure what was happening all the time, nobody would ever lose money. Right. But here’s my thinking. I’m with you when I hear markets shift, when I hear recessions and inflation and all these things, I usually think opposite of what the media will lead us to believe that things, you know, that it’s just Rome is burning. I think it’s always an awesome opportunity for investors when those things happen.

Dave Dubeau [00:02:33] Well, they’re not great when Rome is burning, too. I mean, that’s just the reality. But any hundred.

Mike Simmons [00:02:38] Percent. And it is burning for some people, maybe in certain cases. But here’s the thing. I was just giving a talk last week and I said this and I say it all the time to me, the market, whether you’re talking a real estate or the economy, but specifically the real estate market, it’s a little bit like I think of it like the weather, right? Some people like to snowboard or snow ski, right. So people love that. They want to go up into the mountains and snow ski. Some people like to water ski and they want to be on the beach. Right. And so if I ask ten people, how’s the weather? If it’s freezing cold out and snowing, some people will say it’s great, it’s great weather because they want to snow ski. Other people will say, oh, it’s awful because they want a water ski. Right. And so the real estate market is the same to me. When someone asks me, how’s the market? How’s the real estate market? My answer is always the same. It’s great because I just changed my activity from snow skiing to water skiing and water skiing to snow skiing based on what’s going on in the market. Right. It’s never bad. The market doesn’t have a feeling it’s not out to get you. It doesn’t it’s not good or bad. Right. It just is what it is. And if you adjust your approach, adjust your model a little bit if necessary, to accommodate what’s happening in the market, it can always be great. I know people that have been around so far longer than I have. I know you are in real estate. I think maybe about maybe ten years earlier. Eight years earlier than me, something like that.

Dave Dubeau [00:03:59] 2000.

Mike Simmons [00:04:00] Yeah. You’ve been through market cycles, right? Is there a market cycle you’ve seen where it’s impossible to make money as a real estate investor?

Dave Dubeau [00:04:07] Only if you’re stuck with one particular strategy and correct.

Mike Simmons [00:04:11] If you don’t change. Right? There’s that book, that famous book, Who Moved My Cheese? If you move where the cheese is, you’ll be fine. It’s the people who put their head in the sand. They don’t pay attention. They don’t read the mile markers, and they just keep doing the same thing. And it doesn’t always work in every market cycle. So you have to change. But the market’s great now. It’ll be great in a year. It’ll be great in 20 years. It’s always great.

Dave Dubeau [00:04:34] So Mike, let’s dove into the whole marketing side of things. There’s deals to be had. How are you these days in today’s current environment? How are you generating leads for your I buy houses out of your business?

Mike Simmons [00:04:47] Yeah. So for the last seven years, specifically, seven, eight years, direct mail has been the workhorse. For me, it’s an it’s crazy to me that it still works in 2022. I get it. It sounds antiquated, but it simply does work. And some of it has to do with the demographics of the folks that we’re trying to reach. But it works. And, you know, again, a long discussion about this with a lot of people. People ask postcards or letters. It’s that’s like the big thing, too. I use postcards or letters.

Dave Dubeau [00:05:12] Well, actually, I write back up. Sure. Are you going after what kind of deals you’re looking out for in the first place? Because that’s job number one target market.

Mike Simmons [00:05:22] Certainly. There’s two there’s a couple of routes you can go here. You can go kind of broad or you can go a little bit more niche, right? I tend to go broad with my marketing. I like to market to people with equity. If you have equity, I can help you in a variety of ways. If you don’t, it narrows my ability to help you a little bit. I still can. But so I go straight for equity in age. To be perfectly frank, I want people who have at least 50% equity and they’re over the age of 40 that that’s my bread and butter. And we do that all the time. And so that’s why marketing.

Dave Dubeau [00:05:51] Are you focusing on one particular market area or you just spread out across a lot? So just give me.

Mike Simmons [00:05:57] Yeah. So I’m I live in Michigan. I’ve gone outside of Michigan, but I’m currently focused completely on Michigan. Southeast Michigan is a huge market. And I and I can go much deeper than I’m going. It’s a huge, huge market. But within anybody’s market, I think it’s important to understand we talk in real estate a lot about ABCD neighborhoods, right? Like really great, really bad. I really believe that the money is in in that big area. Right. You can buy the D and but a lot of people it’s going to turn them off. It’s a little bit more may more dangerous crime, things like that. The neighborhoods are great when you can get them, but it’s hard to make your living on all a neighborhoods. And so I dabble maybe 15% of my marketing goes to a 15 to 2 D and the rest of it is in that like b c neighborhoods, right? The first time homebuyers, people who are downsizing. It’s just that meaty part of our market and that’s where I do most of my marketing.

Dave Dubeau [00:06:47] So we’re going after people that are 40 plus and they’ve got at least 50% equity in their property. So you’re in a big, big market. So when you’re generating lists and things like that, how many how many people does that kind of represent in the area that you’re focusing on?

Mike Simmons [00:07:04] More than I can mail to. Right. So, so, so in there. So yeah, I do it geographically. So some people will say while just change your strategy to go anybody over the age of 60 and anybody who has at least 70% equity. I don’t change I don’t change the filters. When I’m looking for a list, I change the geographic footprint. I grow it if I need more people and I shrink it if I need less people that way. When it comes to an equity list, that list stays relevant much, much longer than a niche list. Right. Equity moves at a snail’s pace usually.

Dave Dubeau [00:07:35] So for people that aren’t aware of it, what would you consider to be a niche list or a niche list?

Mike Simmons [00:07:41] Divorce, probate, code violations, you know, those kind of thing.

Dave Dubeau [00:07:45] Closure type stuff. Pre-foreclosure exactly around a lot faster.

Mike Simmons [00:07:49] Yup. Things that have sort of a shelf life, a shorter shelf life equity. You know, if somebody has 50% equity in their house in a year from now, they’ll have 52%. Right. Or 53. But it’s not going to be dramatic. Right. And so we can keep those lists a lot longer. And so by changing, keeping the filters always at the same and changing your footprint if you have to grow or shrink, the list you got last year is still very usable and very relevant this year. You can just add to it, right? You can just keep adding on as you grow. And that’s exactly what I did.

Dave Dubeau [00:08:17] So it’s kind of it’s an evergreen kind of a thing because typically, you know, people moving, downsizing, upsizing that that’s going to probably take out 10 to 15% of your list a year, but you’re replacing that with new folks that are coming in. Cool. So you’ve been doing this for a long time. Like, can you give us an idea of and I know you teach and train people about this, what does your size year list that you’re consistently mailing out to look like and what do you consider to be kind of like the minimum viable this size for this to be worth worthwhile for people to focus on?

Mike Simmons [00:08:51] Yeah, our list fluctuates depending on how much we’re sending between 100 and 150,000 is what our list consists of. So we’re sending out quite a bit. It’s a big list, but it’s not. I mean, I could have a million on there if I got everyone in Southeast Michigan, right? Like that’s a big market. Like you said. I think the minimum viable it’s so hard to say but I know terrible answer is it depends so I won’t say depends. I usually tell people if I don’t have if we don’t have data to date is always the best indicator. But if I had to just throw a dart and say, what does it take? What would I do if I was moving into any market? What size list, what I want to be mailing to. I tell people to shoot for between three and five, throw out three and 5000 mailers per month minimum. Right.

Dave Dubeau [00:09:33] I was doing are you doing the 100, 100 K plus per month. Is that what.

Mike Simmons [00:09:37] You’re. No, no, no, no, no, no. I have a I have a total list of like 102, 150,000. And so we’re going between 30 and 50,000 a month or something like that.

Dave Dubeau [00:09:46] Very good. Wow. That’s another fantastic idea. Hold on to that. Dr. Sack will be right back. Now, are you a real estate investor? We’ve run out of cash or credit to grow your portfolio. Are you looking to grow your portfolio using other people’s money and raising capital? Well, I want to show you how to raise six figures or more in six weeks or less at my upcoming Investor Attraction workshop. You can. Get your ticket and find out all about it at Investor Traction Workshop dot com. We’re going to spend a full day taking a deep dove into this roadmap that I’ve used to raise millions from ideals and I’ve helped other people, just like you, cumulatively raise hundreds and hundreds of millions of dollars for their deals as well. So again, you can check that out at Investor Attraction Workshop dot COM. And as a loyal listener to the podcast, you’ll get 50% off your ticket when you use the discount code podcast. That’s right. Discount Code podcast at Investor Attraction Workshop dot com. See you at the next workshop. And so I do interrupt you. I’m sorry just because I get so excited about this kind of stuff, but so you’re teasing us. Which should we be doing? Postcards or letters? I’ve got my best guess, but I don’t want to. I don’t want to say it. I just want to see if I’m right.

Mike Simmons [00:11:01] Well, you know, there is no right or wrong, but I’ll tell you, I’m pretty passionate about this. Yeah. And I have a definite answer that I will I will defend, I believe, with all my heart. And I just went back into the math I have now spent in the last seven years over $1,000,000 on mail.

Dave Dubeau [00:11:15] Okay.

Mike Simmons [00:11:16] But so I’ve done a lot of testing. Marketing depends. Largely the biggest factor is timing. So if I send you a letter or a postcard, any sort of mail piece. Right. And it’s beautiful. The copy is beautiful. There’s a picture of me and my wife and my kids, and it just it’s it speaks to you. It’s just the best marketing piece ever written. But you are just not selling your house under any circumstances. It’s going to go right in the garbage.

Dave Dubeau [00:11:39] Right.

Mike Simmons [00:11:39] Flipside of that is I send you the worst poorly written card that just says, I want to buy your house for cash, call me, we’ll close quickly. And you desperately need to sell. You will call me, right? And so if we accept that premise that maybe the quality of the of the message is less important than the timing, then frequency matters. We know that, right? We want to hit people. When it’s the time for them to sell in a frequency matters, then we want to go to the cheaper option. And so for letters and postcards, it’s postcards for me. I would rather hit you twice as often than pay twice as much for my piece and mail you half as often. Right, if that makes sense. I think timing is everything. Yeah, timing is everything.

Dave Dubeau [00:12:18] That makes complete sense. And I would have guessed wrong, but a lot of people go letters.

Mike Simmons [00:12:24] I’ve never seen a difference in my response, but I know for a fact that I can send more postcards because there’s always a book.

Dave Dubeau [00:12:31] The way you’ve explained it makes 100% sense because yeah, what we’re what I’m forgetting is not everybody that you’re mailing to. In fact, the vast majority of the people that you’re mailing to don’t give a crap and are not anywhere near ready to sell their properties. So frequency is much more important than having that perfectly crafted message, which, you know, 99 times out of 100 is going to go directly into the into the garbage can then. Yep. Anyhow, so I’d rather I agree with 100% there, I’d rather be able to send twice as often so that you’re landing on that that prime prospect’s doorstep to their mailbox exactly when they need to see that or they’re ready to see that. So I want you got that one wrong there, Mike. So thanks for clarifying that. It makes sense. So now when it comes to postcards, there’s tons of different options. Are you using a standard postcard, oversize postcard, cheapo ones, full color ones? What what’s kind of floating your boat?

Mike Simmons [00:13:29] Good question, too. Good question. This is a very common question I get. I use a standard size postcard I used to use oversize saw no difference in my responses. I definitely don’t use full color. Here’s what I have found. Here’s the counterintuitive point that I’ll make. This is this is the gold nugget that people are going to get wrong because it’s counterintuitive.

Dave Dubeau [00:13:47] Yeah.

Mike Simmons [00:13:48] And I’ve tested this. I promise you I’m right. Just trust me. The postcard that has the full color graphic on the front of a house with a bucket of money or a hand holding a bunch of money or even just a full color. Anything, right? Full color versus the very basic, even black and white or yellow card with black writing. Whatever basic message I want to buy your house, I can close quickly. No closing costs. All that. The basic casual postcard will outperform the highly produced professional doing air quotes, professional postcard every time. And it almost never fails to work that way. And it’s counterintuitive. People think higher production value will give me more credibility. And by the way, don’t use a name like Home Buyers USA. It just sounds like a big corporate evil thing, right? It’s like my website is Mike buys houses for cash and my postcard refers to me as Mike. Right. It’s not even my last name is just Mike. It has to feel personal. People want to sell their house to a person. They do not want to sell it to a company. Company screw you over. And people are wary of that. And it’s a bad feeling right off the get go. If you sound overly corporate or like you’re a nation, what people think they want to do because it makes them sound more impressive. It doesn’t. It makes you say. Sound shady, frankly.

Dave Dubeau [00:15:09] I love that. Now, that one, I would have guessed, right, that that takes me back to the day when I was doing my I buy houses business way back in 0305 and I did the postcards and yeah, the ones that worked best for me were but ugly standard size ones, bright, obnoxious, yellow, bright, obnoxious orange with black printing on them. It worked, and I’m sure you’re doing a slightly nicer version than that, but it doesn’t need to be right is it’s a matter of landing on the right doorstep at the right time when that person is ready to look at that message. And then that consistency and understanding that 99 times out of 100 people are going to chuck them in the garbage because they aren’t ready or needing your service at this particular time. But again, that’s why the volume is so important. So I loved what you said there, 3 to 5000. So give us an idea, Mike, because you’ve been doing this for so long and you got a dollar and you’re sending out, did you say 30 to 40000 a month.

Mike Simmons [00:16:06] Stuff like that? Yeah, yep, yep.

Dave Dubeau [00:16:08] What does that translate into as far as phone calls or inquiries, give or take? Big picture.

Mike Simmons [00:16:15] Yeah, big picture. So we usually get about boy, I’m a little bit removed from this now. I don’t handle the incoming call team, but I think that usually nets us about, I don’t know, 15 calls, 15 to 20 calls a day, something like that a day. A crazy saying pretty good.

Dave Dubeau [00:16:33] Yeah, yeah. Over the course of a month, 15 times 30. That’s significant. You’re getting. Yeah. 405 hundred inquiries a month. Yeah, I’m sending out that volume so. Okay, that gives people a vague idea. So again, if you’re doing the 3 to 5000, like you mentioned at the beginning, they’re there. Mike So that’s probably going to translate in.

Mike Simmons [00:16:52] A 10th of that. Yeah.

Dave Dubeau [00:16:54] Yeah. What, 30 to 40 type inquiries a month.

Mike Simmons [00:16:57] Yeah. Yeah, something like that. Exactly. Yeah. Yeah, that’s, that’s about right. And, and by the way, if you send out, you know, 3000 cards in the first month and you get five phone calls, you may have to ramp that up. Right. Data will start telling you what you need to do. Or if you send out 5000 cards and your phone melts because you’re just getting so many calls, maybe you can dial it back. Maybe you don’t need that many. Right. It’s just it’s an it’s a.

Dave Dubeau [00:17:18] Starting point competition you’ve got for sure on the direct mail. Yeah.

Mike Simmons [00:17:22] I can tell you, if you’re in Southern California, you’re probably not going to get a lot of calls. Right. You may have to have a little more firepower than that.

Dave Dubeau [00:17:28] Yeah, most definitely. Well, that is that is fascinating. So is this kind of the workhorse and the cornerstone of your marketing these days? Yeah, well, the good old good old fashioned direct mail not.

Mike Simmons [00:17:39] Yes. Not only is it that I tell you, I know a lot of very successful real estate investors in the single family market. And if you were to pull them all aside privately and ask them where, where have you gotten the most deals over the last five years? All of them will tell you direct mail. They do other things and so do I. I have other marketing channels, but direct mail consistently brings in the deals for most of the investors I know well.

Dave Dubeau [00:18:01] And I’m going to say if you do it consistently right, because so many percent well are hit miss with all of their marketing, but especially with the direct mail, they come out, they try sending out three to 4 to 5000. Chances are they screwed up and they went to glitzy, to corporate, to the fancy schmancy. And then they think it doesn’t work when they just haven’t done it right. Or they, they, they just don’t do it often enough. And that’s, yeah. That’s why they give up on it.

Mike Simmons [00:18:29] If I could suggest I tell people usually that you want to have at least a 4 to 6 month.

Dave Dubeau [00:18:36] Run.

Mike Simmons [00:18:37] Straight, no breaks, right? Like it might take a few months, but the people who start and stop, like you said, I did it for a month that I stopped for two months. I did it again. May never work. You really need that kind of like six month runway. So figure out what you can do, your budget and all that, and do it for six months and don’t stop doing it. It doesn’t mean you can’t tweak the message a little, make some adjustments, but don’t stop. It’s all marketing consistency in my opinion, but direct mail is certainly no exception.

Dave Dubeau [00:19:00] Now, for the folks that haven’t got very much experience with this, let’s say they’ve got a small budget and give me an idea because I haven’t done this for a while. Mike and I do it. I did it back up here in Canada, not the States. So I have no clue what’s it costing on average per thousand to send out these postcards, give or take. I understand you’re doing it huge. So you got me?

Mike Simmons [00:19:21] Yeah. Volume certainly makes a difference. Yeah, I would say around 40 to $0.45.

Dave Dubeau [00:19:27] Okay, so it’s a.

Mike Simmons [00:19:28] Car per card. I’m sorry. Per card. I apologize when you’re doing 1000 at a time. Right? At a thousand. It’s around 40 to $0.45.

Dave Dubeau [00:19:34] All right. So give or take. And is that including printing and everything?

Mike Simmons [00:19:38] That’s yeah. Printing, mailing, everything. Yeah.

Dave Dubeau [00:19:40] Everything. So for easy numbers, let’s say it’s $0.50, you’re sending out 4000. So that be two grand give or take would have to be. And then you’d be doing this at least for 4 to 6 months to have that that bandwidth. Yes. And then here’s the other mistake I can see people potentially making. And who knows, maybe I’ve got this wrong. So if that somebody is budget, are you suggesting that they send out the same card or. Clear messaging. Well, that’s as a question. Are we sending out to the same group of people month after month after month, or are we varying that? And are we sending out the exact same card month after month after month? Or are you varying that?

Mike Simmons [00:20:20] Yeah, great question. So I found that the best frequency or the best rhythm is to send. Let’s say let’s just use the 5000 mark. Right? We’re going to have 5000 a month. I think your list should be 10,000 is optimal. Right. So you’re in other words, you’re hitting the same person every other month. We said frequency means everything. So if you just keep changing your list and sending it to a new list every month, you’re not getting that frequency. You’re kind of defeating the purpose. So if I’m sending up 5000 a month for six months, I want a 10,000 person list. And I’m just first month, first 5000 next month, the next 5000 because I want to do it now. As far as the card itself goes. Yeah, I really suggest you send the same card. However, here’s the caveat, because you’re right, people will make mistake the first time out. They won’t have the right card; they won’t have the right message. And so if you send out 5000 cards and it’s just crickets, right? First of all, make sure it actually went out. Make sure the drop happened. Right. And number two, don’t be afraid to tweak the message the next month, if the first month. But you can’t stop. And I wouldn’t wholesale change the card. I would tweak it. Right. Assuming that you put a little time and effort into the first one, I would tweak it and whenever you.

Dave Dubeau [00:21:28] Tweet your card, make sure you didn’t misspell your website. Yeah.

Mike Simmons [00:21:32] 100% or your phone numbers. Right, you all those kind of things. But that being said, I don’t if you’re going to change your card. I mean, we could go so far into this man, but if you’re going to change your card, assuming you did a pretty good job and everything less is more. I would I would eliminate more than I would add. You can change but eliminate. So the simpler the card, usually, the better. Bigger fonts, more open space. Because these things are being read. And if you don’t get your message across and make what you’re trying to tell them very apparent to them in like 2 seconds, they’re standing over the garbage. It’s going in the garbage. Right. So don’t add more. Don’t over clutter. It takes take some away, simplify it a little bit and see if that works.

Dave Dubeau [00:22:12] Fantastic advice, Mike. So I know you help people out with this kind of service. If people want to find out more about you, your services, your podcast, what should they do?

Mike Simmons [00:22:23] Sure. Thank you for that. By the way, you can go to my website. It’s Mike Symons dot com. If you go there on the front page, there’s a little button, get my free video. Course I teach you how to do direct mail in a very simple to follow five video course it’s 100% free. Everything I’ve learned about direct mail over the last, you know, 14 years. So you can grab that and I encourage you to do it.

Dave Dubeau [00:22:45] Fantastic. Mike, we could nerd out here all day long. I’d love to, but what I love even better is the idea of having you back and picking up where we left off somewhere down the line. So, Mike, I really appreciate it. It’s been a lot of fun.

Mike Simmons [00:22:58] Thank you. I appreciate you having me.

Dave Dubeau [00:22:59] Terry. Take care. And we’ll see you on the next episode. Well, hey there. Thanks for tuning into the Property Profits podcast. If you like this episode, that’s great. Please go ahead and subscribe on iTunes. Give us a good review. That’d be awesome. I appreciate that. And if you’re looking to attract investors and raise capital for your deals, so we invite you to get a complimentary copy of my newest book right back there. There it is the money partner formula. You got a PDF version and investor attraction book dot COM again investor attraction book. Dot com. Take care.

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