BP Podcast 033: How to Close 27 Deals in Your First Year While Working Full Time with Sam Craven

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On today’s episode of the BiggerPockets Podcast, we sit down with a relatively new investor who is absolutely crushing it as a flipper and wholesaler – Sam Craven. Sam has an incredible story of learning to fight through the initial problems that all new investors face and achieving a lot of success while investing during his weekends and evenings. Sam has a ton of great tips on marketing, making a plan, running an investment business, and a lot more. Don’t miss this show!

Read the transcript to episode 33 with Sam Craven here.

Listen to The Show on iTunes (Preferred Method!)

Click here to listen on iTunes.

Listen to the Podcast Here

In This Show, We Cover

BiggerPockets Podcast _ Real Estate Investing and Wealth Building 9.42.11 AM

  • Working with family without killing each other
  • Closing 27 deals during the first year in business
  • Getting leads with direct mail
  • Investing while holding a full time job
  • Partnering with other investors when first beginning
  • How to lower your direct mail response rate … and why you want to
  • Tips on online advertising
  • Making a plan for future growth
  • How to stand out from the “bad wholesaler” crowd
  • How to build a sophisticated buyer’s list
  • How to handle major problems when they come up

Links from the Show

BiggerPockets Pro Memberships
LoopNet.com

Books Mentioned in the Show

The Millionaire Real Estate Investor by Gary Keller
The E-myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It by Michael Gerber

Tweetable Topics

“To grow as a real estate investor, get involved in the conversations about real estate.” (Tweet This!)

“Transparency is key when attracting clients, partners, and investors.” (Tweet This!)

“Good deals are found through relationships.” (Tweet This!)

Connect with Sam

Sam’s BiggerPockets Profile
Sam’s Website – Senna Homes

About Author

Thanks for checking out the BiggerPockets Real Estate Investing & Wealth Building Podcast. Hosts Joshua Dorkin & Brandon Turner strive to bring top-notch educational content and interviews to our listeners -- without the non-stop pitch prevalent around the industry. With over 80,000 listeners per show, the BiggerPockets Podcast has become the biggest real estate podcast in the world. But don’t take our word for it. We’re the top-rated and reviewed real estate show on iTunes — check it out, read the reviews on iTunes, and get busy listening and learning!

51 Comments

  1. Great podcast as always,

    @sam craven – how many mailers were you sending in the beginning on your $1000 a month budget? How many months would you mail before you used new leads?

    Keep up the good work

    • Nick,

      We were sending about 800-1000 letters each month, and we have learned that go at least 3 months consistently before you change anything. Otherwise the process starts all over again of waiting for the marketing to have an effect.

  2. Good podcast guys.

    I have a question for Sam.

    What service do you use for you phones? I am looking for a service where I can get multiple #’s so I can track my marketing.

    Thanks

  3. Douglas Dowell on

    I really appreciate the “reality” check on how much lead time is needed in order to make this work.

    The information on testing of what your doing and what DID not work for you is much appreciated.

  4. Great podcast! That’s why I like biggerpockets.com, you guys get real info about how things are working and how people are being successful. Keep up the good work!
    Craig
    Austin TX

  5. Sam, fantastic interview (you too Josh and Brandon)! I was originally interested in doing flips in order to build up capital for some buy and holds down the road, but in my market I’m finding that by using the MLS, by the time I find a property that fits my criteria, there are usually multiple offers in on it. I’ve concluded that I REALLY need to start marketing rather than just perusing the MLS in order to whittle down some of the obvious competition, and I got to thinking that while I’m marketing for flips, I may as well start looking at wholesaling AND flipping. It’s good to know that I’m not out of my mind for thinking about branching out; further, I definitely appreciated your comments about developing a plan. I’ve got a lot of the other pieces in place, but the plan is sorely lacking in all but the broadest terms. Time to step back from the minutiae I’ve been trying to learn and put together a real plan. Thanks for an outstanding interview, and keep up the great work!

    • Thanks for the support Chad. I stress a lot about making a plan and setting goals but we are falling behind in keeping our own goals up to date. A growing business can get a bit unruly and sometimes you dont realize the tail is wagging the dog until its too late.

      As for the MLS i think you are spot on. the more barriers there are to entry the less competition there will be for deals. Get out there and do some marketing!

  6. Trenton Parks on

    Sam thanks for the podcast episode great stuff!

    For a business plan you planned 800-1000 mailers per month and 1000$ per month. How many phone calls would this generate and how many good leads would that lead to? Then from that how many closed deals. I am asking for a business model.

    Thanks!

    • Trenton, we were getting about 10% response rate, half of those who called left messages (we now answer live) and you can expect about a 1-2% deal rate. But the great thing is, after tracking our direct mail for so long. Our direct mail ROI % is in the thousands! IF YOU SPEND It RIGHT, THEY WILL COME! (just be patient and stick with it for 3 mo)

      • Sam,
        Great info on the podcast!
        As far as direct mail goes you’re saying after the third mailing is when the deals stop popping? So consistent, multiple mailings is the key? Also, do you switch up your mailing piece (postcard/letter, color, size, etc)?

  7. Hi Sam! On the multi-family acquisition, can you explain the sequence of events for something like that. It almost sounds like you’re not under contract with the owner yet, however, how can you present to investors if you haven’t agreed on a price, performed due diligence, received bids for capital improvements, etc.? I’m probably missing something, but would love to know how that works.

    Also, I’ll be moving to Houston in the next six months. I’ve heard that sold comps are unreliable in Texas (except for on the MLS) because it’s a non-disclosure state. Are you saying har.com’s sold comps are coming directly from the MLS and can be reliable? I’ve had trouble finding a straight answer to this questions. Thanks a lot for a great podcast.

    • Sharon,

      This particular property has not been “typical” because of the difficult negotiations. The deal falls apart and comes back together a couple times a month. We have hard numbers for repair and have incurred some of the typical expenses when working with an asset of this size.

      As for the comps in TX. The MLS is your best and quite frankly only source for comps. Just because the sale price is not disclosed to the appraisal district doesn’t meant he price will not be disclosed to the MLS.

  8. Great interview, Sam. Really appreciate your honesty on the ups and downs of your first year experience. Very good lesson on the marketing side.

    May I ask you one question? I plan to start the yellow letters and bandit signs next week as a new investor. Do you have any success on bandit signs (you didn’t mention it in your interview)? Also, did you mail out the yellow letters or place it at the doors?

    Thank you in advance for your help!

    • Jing,

      Thanks for the feedback. We have had some success with bandit signs. They tend to work best in lower income areas and they also tend to bring properties with title issues of some sort. Some can be fixed, while others simply cant.

      Also, we mail all of our letters. Not sure if it would be more or less effective to place on their door.

      • Sam,

        Thanks for taking time to answer my question. Your insights in this reply and the ones to others are very helpful as we are preparing our first marketing campaign. I will follow up with the results of our campaign.

        Many thanks!
        Jing

  9. Great interview Sam, congrats on your success!
    This was actually one of my favorite podcasts.
    How do you target specific groups (absentee owners, people that inherited a property, etc)? Can you get your hands on such specific lists?
    Thanks and good luck!

  10. Sam,

    I am a new investor and I have been sending direct mail for a couple of months now. I have a limited budget so I only market to about 300 homeowners every other week in my city. So far I have only gotten 1 call.

    My question is, during the first few months of your marketing, did you send yellow letters only? From what you said in the podcast, when you changed your mailing to postcards, you had less responses (but more quality leads).. I am getting the impression that I should only send one type of mailing rather than going alternate, which is what I am doing now — I currently alternate letters and postcards… What could I be doing wrong?

    And what should my yellow letter state?

    Thank you!

    -Maria

  11. Maria,

    Especially starting out I would keep things simple. Go with a yellow letter no more than 7 lines with a simple call to action. Send the same letter each time and track your response rate. After 6mo or so when everyone gets a letter, document the response rate, then send another letter and see if the rate increases. Make sure you don’t market to the same 300 people every other week. You may want to buy a list of 5000 names and try to hit everyone once every 3-6mo.

  12. I loved hearing about your extraordinary success in such a short time, Sam. Have you posted 0n the forums about the 300+ unit deal? What do you need to get that done? What’s your plan for it?

  13. Will you please give more specifics on your direct mail setup? Where did you learn what to put in the letters and postcards? Did you put it together yourself, or use a service, or buy info from someone selling a course? Will you please share your sources, and specifically the content of your letters and postcards?

    Thanks!

    • Tracy,

      The exact content of the letters matter far less then actually getting out there and doing them. I honestly have no idea what our letters said, we do post cards now and have a local company (owned by someone we purchased a house from, hows that for networking) design the postcards, do the mail merge and drop them in the mail.

      I would highly recommend calling yellowletters.com and taking the time to talk with them about your strategy. (i dont work for them, but i do like them)

  14. Sam,

    Great interview! I’m currently wrapping up the E-Myth book and I can see where the concepts in the book may have been put to use in your business. Sounds like you have solid structure to your business.

    I have a question that I don’t think was discussed during the interview – at least I didn’t catch it being discussed. Do you have plans to leave your full-time job. If so, when and what will determine the timing?

    In compare to your business timeline I am on month #1, with over a year of research behind me and taking action. My goal is to be leave my job after year 2 or 3.

    r/dp

  15. Thank you BP for this podcast. We’ve been doing this for only a few short years but after listening to how Sam got to where he did, that got us to write down our business plan. This will help us get focused on what we need to do to reach the goals we’ve set for ourselves. We’re in Houston too and are looking for deals off the MLS list. Will be visiting your site shortly!

  16. Sam – Great Podcast. I am also here in the Houston market. You mentioned in the podcast that with all of your wholesale deals, you include a detailed executable contractor estimation of work for each property. How did you setup a deal with a local contractor to provide you with those estimates? Does the contractor charge for each estimate of work?

    Cedric
    The Hiram Group, LLC

  17. Cedric,

    We use contractors that we trust, and the contractors trust us. So when they come by to quote the job, they know there is a pretty good chance they will get the contract.

    It comes down to having that relationship vs whipping out the yellow pages and calling random ones.

    Hope that helps!

    -Sam

  18. This was a very good podcast for newbies just like myself. I am about to do my first direct mailer and bandit signs. Listening to this podcast made me rethink of doing both at the same time. So I am going to do the bandit signs first and wait two weeks and then do the direct mailing via the post office. I am in the St. Louis market and I heard a lot, there are not enough of wholesalers. Bigger Pockets has been very great for me, I am now totally committed to being part of the community and learning all I can.

  19. Michael Wilson on

    I am currently listening to podcast #33, what in the world is “SEO”? How does one get the first deals when one has NO MONEY? I don’t have $1,000 to start an advertising campaign. I don’t even have a shoestring to have a shoestring budget.

    I have paid for training from Armondo Montolongo, and I am about to go through more training with the company that does the TV show on A&E “Flipping Vegas”, the value to this later one is that they will help with the financing, which has been a BIG problem for me. I am learning more about lis pends. I have used a realtor for leads, but there is a lot of competition, and a lot of the listing were HUD and not available to investors.

    • Michael Wilson on

      I apologize folks for being so myopic in my post, the podcast is great, the information is invaluable. I admit to feeling frustrated, but this is a temporary condition that shall pass as I gain more experience, and learn which questions to ask. even with the training I’ve received I feel as though I don’t know enough to know which questions to ask.

    • Joshua Dorkin

      Michael –
      After that training, have you closed any deals? If not, I encourage you to slow down on the paid training. It is very easy to get caught up in that kind of thing. Start with our free Ultimate Beginner’s Guide to REI and go through it That guide should help you determine what path you want to follow, and if you have questions along the way, use our free forums and the thousands of articles on the site here and our podcasts to help you get the answers you’re looking for.

      Typically if one seminar / training isn’t getting you deals, the next paid one isn’t going to make much difference, IMO.

      Use your peers to help you get going and find a LOCAL mentor — all outlined in that Guide above.

      • Sam – you mention that in 2013 you ramped up your marketing budget to $4K/mo and had to adjust your strategy because of the poor quality of leads. You said you switched to postcards and brought fulfillment in-house, and started receive fewer calls but the leads were more worthy. What in particular do you attribute the higher lead quality to?

  20. Sam,

    Thank you for a wonderful show. Just wanted to take a moment to say I just listened to your podcast.

    I am starting out. I was wondering if you would please touch base and let me know first of all how are you doing a year later? Also, what is your suggestion to getting to a respectable number of positive deals if you have the credit (borrowing someone else’s) to doing your first deal or first few deals but do not have much else (money) to make it all come together. My investor is alright with me buying houses but does not want to do the marketing until a property or two is sold and a profit is made.

    Warren

  21. Sam,

    I just listened to the Podcast and am very impressed. I know you and your father are proud of your accomplishment, and you should be. It’s inspirational to hear a story like your own, as I and many others in the BP Community can relate and want to take the actionable steps to build a business from the ground floor in Wholesaling then utilize the best strategies like Rehab, and or buy & hold.

    Many good actionable steps and take a ways from the audio, thank you.

    Starting with the end in mind and knowing where you want to be 1 week, 6 months, 1 year, 5 years from now is very important – than to build the systems and marketing steps to reach those goals.

    Keep us posted on how your business has grown since August 2013. How did the deal work out with the 319 unit apartment complex? Looking forward to keeping in touch.

    Vince

  22. Justin Hennig

    Pretty sure I’ve listened to this podcast at least 5 times…love it!

    With #Sam Craven’s meteoric rise to initial success with 27 deals in about a year, IMO the real question is, where is the follow-up podcast Josh Dorkin and Brandon Turner? This one is ripe for V2.0!

    Any body else in support of BP Podcast Episode #133: Sam Craven and Robert Craven, 2 years later?!

    • Stephanie Dobbs

      I would love to hear an update as to what’s next! I am working full time and am working to create a schedule that will lead to profitable returns for wholesaling until I’m able to build enough capital for fix and flip deals. But yes @Justin Hennig I would love to hear the second edition with Sam Craven! He became very knowledgable early on.

  23. Luis Medina

    Hey guys, what a GREAT podcast!
    Please let me know the meaning of “SCO” when speaking about mailing.
    Hey Sam, how did you do with the 391 unit building you were trying to buy considering this 3 years after this podcast was made?
    Thanks a lot in advance!

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