Danny Johnson is a real estate investor and host of the Flipping Junkie Podcast. Danny’s done flipping, wholesaling, and rental properties since 2003. He is also the Founder of Lead Propeller, a real estate website creator, and Forefront CRM. Today’s episode gives us a look into his journey from working as a software developer to developing websites and a CRM for helping real estate investors. Danny also tells us about the inbound marketing strategies he used to get leads and why you need a great team.
Danny initially wasn’t interested in real estate because his dad was a contractor for a house flipper. Growing up, he helped his dad do demos. He just didn’t find that work interesting at that time.
After graduating and becoming a software developer, his dad started working with an investor and was having a blast. Danny’s job with a defense contractor was boring and made him miserable. The idea of driving around town during the day, like what his dad did, appealed to him.
In 2003 and for three years, he worked part-time doing real estate because he didn’t want to lose the income from his job. But in 2006, he got fired, which actually excited him. It was the push he needed to really go out and get entirely into real estate.
Danny believes that success comes by actually doing. You have to start even if you don’t know everything yet. When he bought his first house from a motivated seller, he didn’t even know what he needed to say to the title company after he got the contract signed. He had to call his dad to get advice.
He worked with a mentor who provided the funds for his deals while finding the deal, doing the rehab, and doing all the work. They split the profits 50-50. As he kept working harder, he got more and more successful.
For Danny, looking for deals in the MLS was very frustrating. He changed to driving for dollars and looking for abandoned signs. This was advantageous because first, it allowed him to see his entire market, and second, he was able to find contractors while he was out on the road.
Eventually, he put together a website where motivated sellers can fill in their information about their selling property. He was able to get that website ranked and now, it is his main source of leads.
Danny made sure to personalize his website by showing who he is. He advises against using pictures that look super professional or appear like stock photos. Showing his personality and having testimonials and videos helped his website to stand out.
When it came to getting it ranked, he relied on content marketing. It takes time, but it works well. Danny made blog posts on related topics and subjects about why people might want to sell their property.
But he also focused on topics that other people aren’t covering such as probates. This contributed significantly to getting his site ranked.
Getting leads from motivated sellers is better for Danny because he didn’t want to scrape from lists of properties and contact each owner. Outbound marketing takes a ton of time, resources, and is considered annoying by a lot of property owners.
With inbound marketing and the use of his website, he got leads from people who were already looking to sell. He just needed to make sure he closed on the deal.
Danny gets fired up thinking of creative ideas to find deals. But he knows that it’s okay to try multiple things at the start, but later on, you have to focus on one and dial in.
What’s key is to operate investing as a true business by measuring everything that you do. You also need to know where you’re going, the direction, or what you want your business to look like.
If you’re doing direct mail, then document how many you’re sending. Figure out what isn’t working out then do something else. You have to keep fine-tuning and tweaking everything every step of the way.
In his book, Flipping Houses Exposed, Danny documented 34 weeks in his life as a flipper. He revealed that he received 495 motivated seller leads in that time but was only able to close on 11 deals.
That meant he was closing 1 deal out of 45 leads. This led Danny to decide to hire a team. His first hire was acquisitions. Then later he hired a lead manager to take calls and a dispositions team.
Having a team that could give time towards building rapport with sellers improved his closing rates. He was closing 1 deal out of every 5-7 leads.
It also allowed him to no longer have to be in the office all the time. He would only attend meetings until it got to the point where he didn’t even need to be in the meetings. This gave him the time to focus on his software business.
Danny’s divorce led to his ex-wife getting the real estate investing company while he took the software business. He still invests but mostly focuses on long-term rentals. And he still gets leads from his website.
His foray into the real estate software space led to the development of Flip Pilot. It had a built-in dialer that could transfer calls to team members on their browsers. But Danny realized that there were too many features that made useability difficult.
And because his development team did not get along with the back-end programmer, he decided that they needed to scrap Flip Pilot and start over. He had already spent $1M on it, but it just wasn’t what he wanted it to be.
Danny and his team came up with Forefront CRM to organize leads so that investors can follow up on them. This makes sure that they’re on top of what’s happening and nothing is slipping through the cracks.
The workflow is visual, and a user won’t ever need to go back if they close on something they’re working on. Another feature of the software is automated messaging. It can send different messaging with different sequences either through text or emails.
Tasks are also created and assigned to a team member. Danny made sure to focus on making the automation not seem too automated by including some personalization through shortcodes such as name or property address.
Danny recalled how hard it was working part-time in real estate while still working his job. Every time he got a call, he’d have to run out to the stairwell to take the call or return the call. He actually wasn’t permitted to have a phone on him, but he kept his phone on vibrate.
He also worked during his lunch, in the evenings, and on weekends.
Dealing with an awful contractor sucks. So Danny advises that while driving for dollars if you happen upon an ongoing rehab, stop, go in, introduce yourself, and take a look around their worksite. This gives you the chance to talk to them and see how the job is progressing.
Danny also prefers getting someone who manages his subcontractors but also works on the jobs with them. A guy like this isn’t someone who spends his entire time driving around managing a lot of rehabs at the same time.
Danny’s Flipping Junkie Podcast is geared for the newer audience looking to get into real estate investing. In that podcast, he did a series of episodes that were structured in order of what a real estate investing newbie needs to get done. It was similar to an audio course. That series started around Episode 16, but Danny has gone back to doing interviews.
He also started a new podcast called Braver. This is still about real estate investing, but it is more geared towards investors already doing deals and looking at why they’re not making the transition to hiring people and getting out of their own way so the business can grow.
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