While wholesaling is pretty straightforward, using an app designed to help you easily find deals in the market can definitely make a world of difference.
The DealMachine is a revolutionary app hailed as the ultimate real estate investing tool. And DealMachine’s co-founder and CEO is here to share all you need to know to make the most out of this truly amazing app.
David Lecko, the brains behind DealMachine first created the app just to fix his own frustration with real estate investing. Over the years, he has added more awesome features and has helped countless users of the app find their first or nth deals.
If you’re looking for a great tool that can help you make a killing in the competitive but exciting and highly lucrative wholesaling world, today’s episode is exactly what you need to hear!
- Rich Dad Poor Dad by Robert T. Kiyosaki
- Profit First by Mike Michalowicz
- Cashflow Classic Game
- Wholesaling Inc – DealMachine
How To Become A Deal Machine With David Lecko
I’m super excited about this one. We have an individual with us that’s going to show each one of us how we can use an app right from our phone on how we can start getting deals. We’re going to be talking about wholesaling in general. For those who are new to the show, first and foremost, welcome. Secondly, wholesaling is simply the art of finding the deeply discounted properties in your area so you can then turn them into a profit.
Whether that is through an assignment of a contract, where you line it up with a cash buyer, or whether you fix and flip it or keep it as a rental, that’s up to you on the exit strategy. The secret is if you can find these deeply discounted properties each and every month consistently, you can make a lot of money in real estate.
Our guest is David Lecko, the Cofounder of the app called DealMachine. He’s going to go over how this app is going to help each one of us find deals in our market with the power of your phone. How cool is this? It’s tapping into technology. Everything is going into technology these days. He has found a way from your phone how you can start locating these deeply discounted properties so that you can turn them into huge profits. David, I’m super excited to have you with us. Help them understand a little bit about yourself and your background, and ultimately what got you into building this app, DealMachine.
Thank you so much for having me, Cody. It’s a huge honor to be here.
We had a great time in Salt Lake. Everyone got to see how the app work hands-on. If you haven’t seen it, go over to that YouTube channel, Wholesaling Inc, and you can look at it. Let’s break it down. We’re excited to have you.
Thank you so much. You too. I started out in 2016, getting into wholesaling myself. I was listening to your podcast and eventually heard about this thing called driving for dollars and then got my own deals as well. I built the app for myself. It’s awesome to be able to share that a couple of years later on your show.
I’m going to break this down because I always hear this story. Every time you tell it, this light bulb goes off in my head. There was no intent behind this app of making this a national wide app that people could then use and help them in their own markets. This was strictly out of, “I want to build something that helps me find deals in my own market.”
It was 100% for me. Luckily, I had the background of being a software developer. That was my full-time job in Indianapolis. I heard about passive income and escaping the rat race through the Rich Dad books series. That’s when I found out about wholesaling and real estate investing. I ended up building this app to help myself with the follow-through problem I was having while driving for dollars.
This is 100% going through your own struggles and challenges. Instead of giving up or not doing it, or saying, “The heck with it,” you started thinking, “I’m going to create something that’s going to help me build this, get systematized, and in my processes.” What was the main focus of the app at the beginning? Was it to help you with more of a follow-up? Is it locating? What was the basis behind the app in the first place?
Don’t miss out on your deals. You need to follow up the moment you’re in front of the property.
I had read Rich Dad Poor Dad, played the CASHFLOW game, and found out about rental properties. That’s what I was trying to do at first. I was looking for properties where the numbers would work. Nothing on the MLS at the time. It looked like a good deal. I heard about driving for dollars and started driving around, looking for rundown houses, and writing down their addresses.
I did that for about 3 or 4 weeks. At the end of the month, I happened to pass by one of those properties, and I had written it down, but I hadn’t followed up with it yet. Somebody else was out there with a ladder. It looks like they were repainting it. I was like, “Hold up.” This thing looked vacant when I drove by it. I remembered it. It’s sitting there on my list. I got home and looked up the owner of the property. It had just changed hands. I missed out on the deal because I hadn’t followed through and even sent out a postcard or done a cold call.
That was a huge a-ha moment for me. That’s why I ended up building this tool. I was like, “I need to follow up the moment I’m in front of this property because I don’t remember hardly anything.” I honestly don’t remember very well, and I can’t rely on myself to do this. What I needed to do was I needed access to the county records from my phone, and then I needed to be able to send out a postcard from my phone. They are the two things that this app would do that I built myself that following weekend. It’s basic and looked super ugly. It was just for me. It wasn’t meant to be an app for other people at the time.
For those of you reading, I will mention this multiple times throughout the show. If you go to WholesalingInc.com/DealMachine, David has an incredible offer for you if you use the code RHINO. Is the promo code already in it, or do they have to type it in?
If you go to that URL, it’s going to auto-insert the promo code. It gives you 20% off your monthly fee. We’ve never done a discount ever. This is the only discount we’ve ever done for Wholesaling Inc. You guys said I was in the hot seat early on. This is super special. You can get a discount on your monthly fee, $10 off the $49 a month price, and make it $39.
That’s to each one of you reading this. If you love what David is sharing, and you could see it being something that will help you locate deals and be organized using the technology, go to WholesalingInc.com/DealMachine. That’s going to give you the only discount that DealMachine offers. It’s right here, Rhino Nation. Remember that, write or jot that down so that if this sounds like it’s a fit, you can go to that website and get a discount. Let’s keep going. That’s the behind story. What is this evolved into, and what have been the great strengths of DealMachine that you’ve heard from your typical users?
My goal was to get a deal. I did my first deal with it. It was after the seventh postcard. I had driven by this house, and it had a tarp on the roof, so I pulled it out. I clicked on the map and on that house. It told me the address and who the owner was. I pressed the button to send a postcard. The postcard had a picture of the house on it that I took with my smartphone. It was automatically sent out every 21 days.
After the seventh postcard, this guy called me. He’s like, “I want to get an offer on my house.” I was like, “Let me come in and meet you. How about tonight?” He’s like, “That would be fine.” I went out there, and it was dark out. I took a bunch of pictures. I thought I was going to offer $10,000 for this house. It was in really bad shape.
This blows my mind that you’re even saying these numbers because you came in by trailer in Utah for $10,000, and you’re buying a full-on home in Indiana for $10,000.
It’s crazy because I bought it for $4,700.
You even got it lower.
I felt like it was too low, but I looked at some more of the data. I was like, “This is what it’s got to be for the square footage, condition, and everything. These are the repairs that need to be made,” and I showed him that. He accepted my offer without any renegotiation or anything. That was the first success for me. I could have wholesaled it. I ended up keeping it and making the repairs all in about seven $70,000, and it’s rented for $1,800 a month.
That’s a great cash-on-cash return. It’s a great investment.
It’s really good. It could have been a killer wholesale deal too, but that’s the only success I ever wanted with the app, but now, there are a lot of other people that are using it. I put it on the App Store because a couple of other friends wanted to use it in town that I knew from this real estate meetups. As they started using it, people started finding it.
One of the big homebuyers in Indianapolis was like, “I’ll pay $1,000 to try any marketing method.” I was like, “$1,000?” That was for some postcards. They were sending a certain amount of postcards to the app. That’s when I realized, “I need to make the app look better and have a better onboarding so that other people can use it too.” The rest is history. It organically picked up.
It has evolved. You’ve made awesome changes to it. From the first time I used it to what it is now, it’s completely different. Do you feel like the user was helping you create that where you’re getting great feedback? What helped you continually make it to what the app is now?
It started out with a personal need, but now it’s heavily driven by what people requests. We’ve got a feature request page where people submit ideas, and then everyone votes on the best ideas. We then build the top-voted ideas. It’s heavily influenced by what people are requesting.
In Deal Machine, skip tracing is instant. Even if they don’t want an offer, everyone gets an offer.
Think about the best apps out there. It’s run by the people. It knows the fastest route because people are going in there saying, “Don’t go this way. There’s a pile-up.” Because they have that real-time data, that ends up being one of the best map or traffic apps that I use because it’s driven by the users, and this is brilliant. The fact that you listened to the people, but not only listened to them, but you also created the changes. This is why people are loving this app.
A perfect example is I love the Waze app. That thing is great. It saved me from a speeding ticket. That’s because I’m trying to drive so fast to add all these properties into DealMachine.
Tell me this, what would they be looking for? Let’s say someone’s brand new reading. They’re reading about wholesaling, and now they’re thinking, “This sounds like it’s right up my alley. I may have a lighter budget on marketing.” When they use this app, it’s user-friendly and budget-friendly, meaning it’s very light on the pockets, which I love, but what would they look for when they use this app? Give them some details of, “These are the homes you will be looking for when using this app.”
You’re looking for physical distress. Imagine you’re in a pretty good neighborhood, and there’s one house that sticks out because it doesn’t look quite right. The landscaping’s overgrown, there’s a bunch of mail pouring out of the mailbox, or maybe there’s peeling paint. As I had mentioned, there was like a tarp on the roof. Even some subtle things like, “It has window air conditioner units,” which is a sign that the house probably hasn’t been updated in the last years. You’re looking for houses that stand out that are not as good of condition as the ones next to it.
It’s something that has been lacking maintenance or in need of desperate repair from the yard to the home itself, missing shingles, or a broken garage door. You’re looking for things that are distressed in general.
Those are fantastic examples. I was told to do this, but now that I’ve seen so many people get results with it, I realized that if you can purchase a list online, where a lot of people will say, “Purchase the absentee owner list,” you have to send a lot of mail to those lists because other investors have those lists too. If you’re driving around and looking for properties that are physically distressed, you can’t buy that list.
You have to lay eyes on the property and determine that yourself. A lot of other investors are probably not hitting those people with the same amount of mail or cold calls because it’s a unique list you’re creating. The app helps you scale that process of creating your own list. I believe that’s why it’s so easy on the pockets because you have to send a lot less mail to get a deal because it’s so targeted.
I love the fact that you have made it integrated into this app. For those that are reading, it’s all a one-stop shop. You open up the app and locate this home that has missing shingles. From there, let’s walk them through. This is where you’re going to be even better than me because I have my team go out and do this. Help them walk through. They open up the app. They have now located a home that’s distressed. What would they then do with their phone to make this transaction all the way to the end? “I’ve located one. I want to go to this one. I may want to skip trace it.” What does that sound like?
As you’re driving, the app is going to follow you. There’s going to be a Google Maps that pops up in the app. When you see a house, you look on the map, click the house, tell you the address, and then look up the owner. It says who the owner is. It will say, “Absentee owner. Owner occupied,” or an LLC owns it. You’re going to press a button to take a photo of the house. You then can press send mail. That mail is going to go to where the owner lives.
If it’s an absentee-owned property, the mail is going to go to wherever the owner lives rather than that property, but it’s going to have a photo of their rundown house. If they live in Utah but they got an Indiana rental property, they may not even know their house looks so bad. It’s a wake-up call for them when they see that photo on their postcard that you’re letting them know like, “Your house doesn’t look good.”
“That’s not my home.” “No, it is. I just drove by it.”
A lot of times that will be the case, or they’ll say, “It looks like you put a lot of time into this and visited my property. You must be serious. I want to do this deal with you,” rather than somebody who sent me a more generic postcard. That’s all you do. You can fully control how often that mail gets repeated, so you don’t forget. It’s a setting right there. You say, “Repeat every 21 days. Do it five times,” and you keep driving, so you go on the next one.
They’re able to run this all from start to finish. They’re able to get out of the campaign. One of the other features is that you can skip trace that home, and it will pull up all numbers associated with that property and call them on the spot. In fact, we did this on the YouTube video. By the way, if you’re reading this and you’re like, “I want to know more about this,” always make sure you go through our tribe discount. That’s what we do for you guys. We want to make sure that you are not just getting a great product.
This is something I personally use for my Utah Sell Now business and helps us get deals. Not only do I use it and say it works great, but whenever we bring someone on, we also want to make sure that our tribe gets something special for using it. When he says, “We’re the only ones that get this discount,” we’re the only ones that get a discount. Make sure if you do want this app, go to WholesalingInc.com/DealMachine. The promo code will already be in there. It’s RHINO. That gives you a discount on your monthly fee every single month.
You’ve even integrated skip tracing. We did this on YouTube, where it pulled up 3 or 4 different phone numbers, and we went through and started calling them. It could be the homeowner’s phone number or a near relative’s phone number. That was a pretty cool feature. Tell us how that benefits most people because a lot of people don’t get access to LexisNexis because they don’t own an insurance company or don’t have the credentials to be able to qualify for that. How are you able to do that and help these individuals that use your skip tracing?
In the app, it’s instant, and it’s in your car while you’re sending in front of the property. I remember we were in this neighborhood where you’ve got a rental property. We saw another house that looked rundown, and we pressed the button to get his phone number and call them on the spot right there. We could call him while we’re thinking about it instantly. We don’t have to wait for the number to come back or anything like that. It’s instant. We could call him and see if he wanted an offer on his house. If not, move on. If he does, awesome. We go back to the office and send him an offer. Everybody gets an offer.
In the tribe, we always teach day in and day out. Everyone gets an offer. You’ve thought of everything. Are there other integrations that you’ve thought of in the future that are like, “We’ve got some good ideas that have been submitted to us, and we’re working on this?” Are there any other cool little features that we haven’t covered that they could understand as part of this app?
The one thing I haven’t shared yet is, let’s say, you’ve done several deals yourself. Your time is probably better spent working deals than it is driving around yourself. A cool thing about DealMachine for more experienced investors is that you can have a whole army of people out there driving for you. If you’ve got a team member, you can give them access with their own log-ins so they can add properties for you, or you can get your Uber driver on board or your mom, and they can add properties, but they won’t be able to spend any of your money. You have to approve the properties in order to start the mailers or in order to do the skip trace. You can then focus your efforts and leverage your time by having other people out there.
DealMachine has a whole system for this that you can set up a landing page geared towards getting people to sign up and add properties for you. They can learn about how they’re going to make money from you because you can customize your payment structure for them. They can get trained and onboarded and start adding properties for you without you having to do any of that heavy lifting yourself.
Do you handle the training? Is it something on your side who is a trainer? Do you still train them?
Stop wasting time worrying about what you’re going to do next. Go out there and start taking massive action.
We have six pre-recorded videos that you can use. You can adjust which recorded videos you use, such as how you’re going to pay them or what level of distress. Do you want super high distress properties, or do you want more of those diamond neighborhoods where there’s a rough house every once in a while? You can put your own videos in that portal or select our videos that meet your criteria. It handles the training hands-off for you.
They all get their unique log-in. This is something that’s intriguing to me, and I use this feature. I want to help other people understand that they might be at a stage where they’re like, “My time is valuable. I want to close up the deals and put them under contract, but I want someone out there still always filling the pipeline with these amazing leads.” They have their own unique log-in. Let’s say you have Jim and John out there driving. Are Jim and John not overlapping each other?
They can’t add the same property. You also see where they’ve driven. It’s called route-tracking. If they’ve driven that area already, the whole team can see, or other individuals can see where you’ve driven, so that way they can go to areas that are fresh.
I love that feature. Readers, if you’re looking for a great way to essentially get into wholesaling that is a low cost, low budget, but also direct, and when I say direct or niche, it’s where they’re not maybe on the tax delinquent list or high-equity list. They’re just out there, but you got to locate them, and you have the time. This app is what’s going to help you get out there and locate these properties.
Once you do, the app walks you all the way through to where they’re getting a postcard, or you can call them right on the spot. Does it also hold a follow-up for all the people you track? You’re saying on the follow-up system, you’re putting it into the app saying, “I want this guy to receive a postcard 5 times, 8 weeks apart,” and that can set it up for you?
Yes. You set it as a default, and then every property you add is going to do that and set that follow-up sequence.
If you’re looking for an easy way to get into wholesaling or an easy way to go out there, you have a lot of grit and determination, drive out there and find these hot deals, and you want an app to facilitate all this stuff for you, DealMachine has been something that we’ve been using for quite some time. We have loved that every time we use it, we feel like there’s some new improvement. It was already great. It was already making us deals, but they’re constantly improving it and going off what the users are saying, which is brilliant. I’m glad we touched that, David. I don’t know if we touched on that in the YouTube video, but this is awesome.
If you want to see what that app looks like. We did an interview when David came to Salt Lake. We drove to the Salt Lake area and used this app, so you can see from start to finish how that process looks. To each of you, DealMachine has done an awesome offer for the tribe, and you can do that by going to www.WholesalingInc.com/DealMachine. The promo code will already be entered, but it’s RHINO. It will give you a discount on that application every single month. David, is anything else that we missed or something you want to share with them?
There’s one important thing. If you’ve got a notebook, write this down. You need to add at least 200 properties that look distressed. It takes at least that much in order to get a deal. You need to add at least 200 that looked distressed and reach out to them a minimum of three times. When we were looking at all the testimonials coming in, we noticed that you’ve got to add at least that much and have at least that much follow-up in order to get a deal, or maybe a little more, but we wanted to set the expectation so that you can go out there and add that many properties.
These are statistics that they’re seeing. Could it be a little bit more or less? Yes. The whole point is this is a game of numbers. The more numbers you pump into the system, the likelihood of you getting a deal continues to increase. I appreciate you sharing that so they can at least have some expectation where a majority of the users of the app are coming in at a minimum of 200 fresh new inputs of these homes.
Also, as you said, a touch of three times. Send that postcard 3 times over a 5-week, 8-week, or whatever cycle they get three touches, and it can turn into a deal. That is solid information. I appreciate you sharing that. We always like to end the show the same way, and I’m going to have it be you as well share this. Two things, if you’re getting into wholesaling and it’s your first time getting into it, knowing what you know now, what would you do differently?
I wasted too much time worrying about what to do. I would go out there. You always say, “Take massive action,” and I would have added a lot more properties right away because I was dipping my toes. I was like, “Let me add 40 properties here and 30 there.” I wish I would have gone out and set a whole weekend aside and done the 200 right away. That would have sped things up for me.
Second, what is a book that has been game-changing for you? Whether it’s a mindset, something you’ve learned, live by, leadership, or whatever it may be.
It’s Profit First.
I met that guy. Thank God we read his book before we started our business.
You sounded knowledgeable too when you talked to him.
Whenever you get your first 2 to 3 deals, you don’t know how much to pump back into the business versus spending on yourself to live. You got this weird tension of, “My business isn’t doing well. I’m going to pump all this back into my business.” Meanwhile, you’re starving on the street. It helps you find that balance without guilt. Make sure that you’re treating yourself correctly while also growing your business. It breaks it down for every stage of business that you’re in on how much profit you should be taking in. It makes it easy. Have you guys read that book?
Yes. We’re very familiar with it. Going through the program when I was a student, that was a book referred to me by Tom. He said, “Set up your bank accounts this way, and you can’t go wrong.” Wholesaling Inc’s bank account is set up through what we would call Profit First methodology. We even use it for our coaching business. It’s a brilliant setup. It’s an easy way to understand. As you’ve said, “You’ve got to be able to pay yourself and help your business continue to grow.” It breaks down percentages to help that happen.
David, I appreciate you so much for being on the show. There are individuals out there looking for new fresh ways to find deals. They’re trying to find ways that might be where there are not a lot of individuals doing it, but also something that is going to be friendly on the budget. I love that you’ve been able to cover all three of those things. I appreciate your time so that you can help them understand that there are answers and ways to make this happen. You gave us some statistics that are very crucial to understand, so thank you so much for doing that.
Thank you, Cody. It’s a huge honor to be a part of the show. As I said, I was reading to this early on myself, and it was extremely helpful to be able to know people that were successful. You guys break things down so simply as well. Thank you very much.
Rhino Nation, this has been an awesome episode. I’m grateful that David joined us and that he was smart enough to think ahead, start building this for himself and get uncomfortable enough so that each one of us that wants to know how to capitalize on driving for dollars and move forward and build this app out. There are so many users now using it and are finding success.
If you’re looking for that little bit of edge, that next marketing channel, or your first marketing channel, look at driving for dollars with the DealMachine app. You can get a great discount. It’s for you, Rhino Nation. You can go to www.WholesalingInc.com/DealMachine. I’m grateful for you guys being here on the show. Get out there. Take massive imperfect action, and we’ll see you in the next episode. Take care.
- Wholesaling Inc – YouTube
- Rich Dad Poor Dad
- Utah Sell Now
- Profit First
- Be sure to join the Wholesaling Inc Facebook group
About Cody Hofhine
Cody Hofhine, a multiple Inc 5000 Business Owner. Co Founder of Wholesaling Inc. the #1 Real Estate coaching program across the nation. Co Founder of Joe Homebuyer the leading Real Estate Franchise. A successful Real Estate investor/mentor and sought after Speaker.
Cody has coached over 3 thousand students on how to successfully Build their Real Estate Business through his real estate training as well as help individuals perform at their highest levels with his one-on-one mentoring.
Cody used his background in sales to quickly build multiple 7 and 8 figure Real Estate Businesses that all start on the foundation of clarity or Vision and Purpose.
Cody loves being with his family and doing crazy tricks behind a boat.