Posted on: October 14, 2020
WI 536 | Marketing Channel

 

The massive value radio can offer to wholesalers is no longer up for debate. But what about other people engaged in other aspects of real estate? Today’s guest is Charles Flaxel. Charles is a successful fix and flipper who gave radio a try and is quite happy about making the shift.

 

In this episode, Charles shared his experiences and successes with radio and how it has helped him take his fix and flip business to the next level. If you’re in the fix and flip business and on the fence if radio marketing is a good idea, consider listening to this episode a must!

The Low Cost, Set It And Forget It, Marketing Channel That Continues To Produce Massive Profits With Charles Flaxel

The massive value radio can offer to wholesalers is no longer up for debate. But what about other people engaged in other aspects of real estate? Today’s guest is Charles Flaxel. Charles is a successful fix and flipper who gave radio a try and is quite happy about making the shift.

Episode Transcription

I’m excited about this show because we love talking with students who are utilizing radio and showing you their success. One thing I tell you about it and what it’s doing in my business, but the proof’s in the pudding when you can sit down, talk with students and tear apart their experience with radio on what they’re seeing.

I’m excited about having on Charles Flaxel. Here’s what radio can do for the fix and flip. A lot of times, people do wholesale, buy and hold. You’re going to learn that Charles is a fix and flip guy, so he’s utilizing radio for that. It’s going to be interesting to look at his numbers because there are bigger pops on flips than there are on wholesale. I think we’re going to see some stronger dollar-per-dollar returns. Charles, welcome to the show. Glad to have you.

WI 536 | Marketing Channel

Marketing Channel: With the radio, it’s a focused audience, less expensive, motivated, and you’re usually the only guy in the room.

 

Very nice, Chris. It’s fun to be here.

Where are you at? Where are you located? Give everybody a little bit of a nutshell of what you got going on.

I’m from Portland, Oregon. You probably heard about us on the news. I don’t live in the riot zone, so I’m safe from that stuff, but that’s where we’re doing most of our business. There’s what they call the Willamette Valley. There’s an I-5 quarter of Eugene, which is 120 miles south of Portland and there are various cities in between. We’re working 50 miles South of here up to Portland and the metro area.

I run a virtual staff. My disposition person lives up in Oregon as well. She’s right up there with you because I think she saw your name and go, “He’s in my state.” She always updates me on what’s going on up there with you guys. Pre-radio, you’re a fix and flip guy. Everyone loves this question because everyone’s looking for how to generate distressed seller leads. You and I were talking. I was like, “What are you working on your business now?” You’re like, “It’s always the same. It’s generating more opportunities. I’ve got money to buy and crews ready to rehab, but I need to pick up more flips.” Before radio, how were you trying to create opportunities?

We did a couple of things in 2021. We’ve done direct mail on and off in the past. I’ve never been a big fan of direct mail.

Why is that? It’s funny you say that. Throw that out there if people want to know why.

You have no idea what their motivation is. Everyone tells you to do it, “You got to do direct mail.” Which postcard you choose, what size, do you want the little zipper envelope, do you do the yellow letter, the little postcard, the big postcard or a picture of you or not? There are many different things and it makes your head want to explode and you got a deal to do.

Returned mail, and then people call you up and they’re, “I don’t want to sell my house. Why are you bothering me?” It’s not the space that I want to be in. We’ve done it and you send it over. You got to manage the repeat mail, put them on a CRM and you’ve got to call them. I could hire somebody to do that stuff.

If you’re reading and you’re newer to real estate, maybe you’re like, “Should I do direct mail? Yes or no?” Direct mail works, but Charles and I are saying that it’s a high-maintenance marketing channel, and I completely agree with him. It’s something that is going to require a lot of ongoing maintenance, variables and decisions. As you said, “Picture of the house, not a picture of a house. Is it a pink or blue post?” It goes on. It works, but it’s a lot of work to work that particular system. Besides direct mail, anything else you were doing to generate flip opportunities?

We’ve been doing Google AdWords for years. That’s been decent. It’s been steady and expensive, but it’s been moving us forward. In 2021, we started doing some Facebook Ads and that did not do well.

I have not yet come across a person yet that says they’ve done well on Facebook. Here’s what I hear on Facebook. You’re reading and we want to help you know what we know and if we can help you learn from experience. It’s a high-volume source. Meaning, you’re going to a ton of leads through it, but the problem is the quality is super low. That’s what we’ve experienced. Has that been the same for you, Charles?

Google AdWords is expensive. You still have more competition, and there’s still a number of tire kickers.

They’re like retail people. I’ve seen them come through it. They want more than what their house is listed for on the MLS now.

I haven’t come across anyone that’s had good success with Facebook. Now, pay-per-click, Google AdWords, we do the same as you do. We utilize that source. I feel like it’s a good source that generates some decent opportunities. You and I are definitely on the same page on what we’ve experienced around marketing. Let me ask you this. You’re doing Google AdWords and direct mail. What caught your attention about radio? Of everything you could choose out there, why’d you go, “I think this radio thing is going to be a good fit for our business?”

Listening to BiggerPockets Podcast, you were on with Brandon and it clicked. I’m like, “We’ve got to try that.” It sounds straightforward, direct and something that’s turnkey. Right after I heard that I told my wife, “We’ve got to give this a shot. This Chris guy is getting it done. I think we could do it too.” From hearing their podcast to getting on the air only took six weeks or something.

I want to hit on two points you made there. You were talking about the ease of the management, so let’s compare it to direct mail. Do you feel like you’ve got to do a lot of work to maintain the radio campaign to keep it running? I say, “Set it and forget it.” That’s my terminology, but people want to know. We’re talking to a student that’s utilizing it. Does it require a lot of work to keep it going or is this set and forget it? What is your opinion?

You were listening to those Ron Popeil infomercials late at night about the little rotisserie ovens. You set it, forget it.

I wasn’t around when those were happening, but someone had told me like, “That set it, forget it term was used for rotisserie cookers.” It’s funny you say that. You won’t believe how many people tell me that.

It is. You record and negotiate. That’s one of the points you’ve got to make. Negotiate your rates, your terms and all that. For us, in our situation, that went smoothly, which I was happy to have. One of the bigger challenges is recording around because of COVID. We’re trying to figure out space and usually, you go to the studio and record it. My wife and I jammed in our walk-in closet with the iPhone, we’re trying to do our commercial, but it worked out. We went to air and it was brilliant. We got to re-record it. They sent a tech out or an engineer out and we recorded it. It sounds a little bit better.

I love that you guys hid in the closet and recorded it, but that’s probably the quietest place in the house.

That’s what they told us to do.

Let’s go back to the statement you were talking about, the setup. If you’re reading, as we talk about radio, we want to give you every facet of it. People always ask me, “What’s the biggest challenge with radio?” It’s always negotiating with the radio stations because we’re buying radio at a deeply discounted price like you buy real estate. Every student has differing experiences, but I find more lean toward if I ask this question, they’re going to give me a 2 to 3 but let’s ask you, Charles. On a scale of 1 to 10, with 10 being radio is super hard to set up, 1 being easy, where would you have ranked it in the sense of setting it up and negotiating?

Easily, I’d say 2.5.

That’s primarily the number that comes out. Occasionally, we get students to go, “It felt like a 7 or 8.” It’s the only hurdle you have to get over in setting it up. Let’s talk about the success that you’ve seen so far. You’re a fix and flip guy. You and I were talking. You got an ad spend of about $2,000 a month to get started and that’s what we tell everyone. It’s $1,000 to $2,000 to get going but so far since you’ve been up, you launched right at the end of June 2021. We had the 4th of July 2021, so probably not a lot happening until the middle of July 2021. Now, you’ve got two fix and flip properties that you’re working on that you’ve already picked up.

I picked up two deals. It was a simple call.

Let’s talk about that. You and I were talking. Fix and flip versus wholesale is different or buy and hold. In fix and flip, we’re looking for deep discounts because we’re not the end owner. In a competition setting, if I’m going up against a wholesaler, it’s going to be hard for me on the fix and flip route because they’re going to pay more than me. Let me ask you this. On the two deals that you picked up on the radio, did you have any competition?

WI 536 | Marketing Channel

Marketing Channel: The great thing about radio is you’re primarily on your own when you show up at that appointment.

 

No. One of them, they heard it. They had a bad tenant and wanted them out. She gave me a number and everything. That was a no-brainer.

I’m calling you, here’s my number and you’re like, “Good. I’ll take it.” Was it ready to go?

It was that simple. I happened to be home. I always keep my phone on me. You want to answer those calls live if you can or if you have a VA. I sat down, typed it in and I’m like, “Look at those estimates. That’s $260,000 and she wants $100,000?” That’s a no-brainer.

That was easy. That was a lay down that you got on radio. What about the other one? Did you go up against 5 or 6 other people?

I didn’t. The person owned it free and clear. He had a bad tenant as well. He said he talked to another investor. I think it was $175,000 he was going to sell it for. He told me right away. He’s like, “I’m done with this person. Here’s my bottom line, $155,000.” I did my homework on it and I’m like, “That’s a deal.” Not at that time he called. Essentially, that other investor had helped me negotiate it down about $155,000 from the $175,000.

He pretty much teed it up for you.

He had. He gave me the bottom line and I was like, “Let’s play ball.”

If you’re reading and you’re looking at marketing channels, you might have a marketing channel where you feel like every time I go out to an appointment, it’s me against X amount of other investors. I can tell you that we experience on the radio side because we’re not list dependent. We’re not getting called into appointments with sellers where they responded to postcards when they got 50 of those or they got hit with a bunch of text blasting.

The great thing about radio is primarily, you’re on your own when you show up at that appointment. In Charles’s case, I think it’s so important for his business because it allows him to get that deep discount that he needs to run a flip business. He needs it deeper than we do on the wholesale side. Charles, I was listening to your business. That’s why radio is a good fit for someone like you, a fix and flip person.

Even some of the profit markets at the end of some of these deals are still going to be better than the stuff we’ve gotten through our regular marketing channels. One of those might even push some of the numbers we’ve done and one of our best deals ever. I think that’s $83,000 or $85,000.

$83,000 off that radio. You and I were talking. You’ve got over six figures, we’ll say it conservatively. We are talking about the numbers but over $100,000 on these flips that you’ve got running. I always like to give true numbers, dollar-per-dollar return and I always tell people, “For every $1 you spend, you’re going to get $3 to $4 back.” In that case, in Charles’s world, if he was spending $2,000, 3 times that would be $6,000. Four times would be $8,000 but you and I were doing some napkin math because you’re flipping and you’re pulling out such bigger profits. What’s a conservative dollar-per-dollar return that you’re looking at potentially?

We’re looking at $30 for every $1.

That’s huge. We’re not saying that everyone gets a $30 return, but we’re letting you know what’s possible. Particularly when Charles is in a good market, he negotiated a heck of a price on the radio for $2,000 for a good station that’s generating call volume for him. He’s going to hit a $30 return right off the bat and out of the gate on this thing. That’s huge. We need to focus on you and help you go get another station and get that call volume up even higher, which I think is great. Now that you’ve been running radio and you’re looking back a little bit, what are maybe 1 or 2 qualities that you appreciate about it versus maybe Google AdWords or direct mail? What have you seen so far? What do you like most as a characteristic?

Direct mail is a high-maintenance marketing channel.

Google AdWords is expensive, for one. You still got more competition, pricier and there’s still a number of tire kickers. With the radio, it’s a focused audience, less expensive, they’re motivated and you’re usually the only guy in the room. It’s been awesome so far.

Speak to the quality of the lead. Out of the amount of conversations you had, did you have to go through a lot of leads via radio to get a deal or did you find the conversion was high in comparison?

It’s high. You discard the couple that maybe didn’t hear the message well and they listed their house and they called you. You push those aside. As we’re talking, the numbers are showing up to be for the two of the legitimate calls we’ve got so far. We’re taken down at 15% to 20% of calls.

That means maybe you’re converting 1 out of that’s 5. Let’s be safe. Would you say that you’re confident that for every ten calls you get off radio, that’ll equal a deal?

Yes. Our numbers are better than that, but I don’t want to say too often.

I’m beating that out as well. People always ask, “What is the quality?” You can generate that. Charles is saying his is like 1 out of 5. I’m being conservative and going 1 out of 10. Compare that to direct mail. I can remember, Charles and my numbers. I think we were ranging between 1 out of 60 to 1 out of 80 direct mail calls to be a deal. It was high.

When we did it, our numbers were something like 80 to 90 even.

It’s high. By comparison, you can go 1 out of 80 on direct mail. It works. You only have to do a lot of sifting and filtering to get down to the gold. On the radio side, what we’re saying is it’s much easier to get a lower call volume and pick up those deals. Particularly if you’re new, you’re trying to get out of the rat race of working a 9:00 to 5:00. You want to be a full-time investor. The last thing you need to do is launch a marketing channel that ends up being a second job for you. At least on radio, it’s a small call volume. When your phone rings, you know it’s radio because you programmed it to tell you that and you’re taking a low call volume and picking up those deals.

If you’re reading, a couple of things. First and foremost, if you always want to put a face with the name, go to YouTube and subscribe at Chris Arnold – Real Estate. We’re always dropping additional content over there that we’re not doing on the show. Join us and subscribe to our YouTube. Secondly, at this point, we bring student after student. At this point, we are seeing success with it. I was so excited to roll out radio. Charles, I don’t know if you’ve ever taught anything but this was one of those things I had in my back pocket that I knew was a game-changer. I held it back.

I’m excited to share it because if you’re going to teach something that you’re passionate about and you know works effectively and radio is one of those things. It’s one of the most effective tools and resources that I’ve had in my back pocket for a long time. Check to see if your market’s open. I can’t remember how many students we’re up to at this point, but I know that markets are sold out. Call, do due diligence, book a call and see if your market’s open. You do that by going to WholesalingInc.com/reiradio. Book a call and see if your market’s open.

People love these because they want to be able to know the authentic story of something working and I get it. I get thrown ideas and concepts all the time. Nothing worse than picking up something to find out it doesn’t work. That’s like, “That was a waste of time and money.” Your stories and you coming on helps students go, “This is the real deal.” If someone’s still on the fence and they’re like, “Should I do this radio thing or should I not? Maybe I should go after another marketing channel. Maybe I want to do X or X,” what would you say to that person that’s riding the fence? What would you tell them about radio to help them make that final decision?

It’s been enormously successful for me so far. We’ve tried a lot of the other ingredients in the cupboards and they haven’t produced the results that radio has and the ease of it. Not only results, but we’re talking a very focused call volume of people that are very motivated. It seems like you’re the only man in their living room to negotiate with them and the consistency of pushing a button and letting it go. It’s awesome.

The phrase I hear you saying is, “I’ll boil that down.” I feel like Charles is saying, “Look at radio because radio is easy money.”

Pretty much.

That’s how I’d sum up everything that you said there. Charles, thanks so much for coming on. I appreciate you sharing the story. I know it will help people. It’d be an inspiration as everyone’s trying to figure out how they want to pivot for 2020 and get ready for 2021. Thanks for the value that you shared.

We’ll have to regroup in about a year and I can tell you about it.

I will circle that. To the rest of you, thank you so much for joining us. Until next time. We will catch you soon and add more value. Talk to you later.

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About Chris Arnold

Chris Arnold is a 15 year Real Estate veteran who has closed over 2500 single family real estate transactions in the DFW metroplex. Chris is the founder of multiple companies that are managed by a US virtual team, which allows Chris to run his organizations while living in Tulum, Mexico full time. His passion for leaders has led to the creation of Multipliers brotherhood which serves the top 5% of real estate entrepreneurs out of the US. Most recently Chris has launched his REI Radio coaching program. This program is designed to teach real estate investors the marketing stream that everyone knows about but NO ONE is doing!

 

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