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In an economic downturn, you can’t rely on what used to work. Being reactive won’t help you thrive.
If you want deals, you have to innovate.

Today, you’ll hear from an investor who solved his business problems by innovating. David Lecko shows you how to spot and close on properties in any economic situation.

Ready to leave behind outdated tactics and become a smart investor? Listen now!

Show highlights include:

  • How a software programmer with zero experience closed 8 properties by generating using his car. (7:24)
  • Look at any house. If you spot these subtle signs, the owner might want to sell. (13:02)
  • If you’re not mailing houses this often, your competitors will ring that doorbell soon. (16:27)
  • Why Uber drivers love to generate leads for you. (18:12)
  • 3 ways irrational investors are changing real estate marketing to your advantage. (20:52)
  • This “open secret” of real estate lets 130 investors close 50+ deals yearly from home. (25:15)
  • Why passive income is a myth. (29:08)

To get the latest updates directly from Dan and discuss business with other real estate investors, join the REI marketing nerds Facebook group here: http://adwordsnerds.com/group

Need help with your online marketing? Jump on a FREE strategy session with our team. We'll dive deep into your market and help you build a custom strategy for finding motivated seller leads online. Schedule for free here: http://adwordsnerds.com/strategy

Claim your pitch-free strategy session at: https://adwordsnerds.com/strategy

Find out more about David Lecko at: https://dealmachine.com

Read Full Transcript

You're listening to the “REI Marketing Nerds” podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords Nerds, a high-tech digital agency focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition, and live a freer, more awesome life. And, now, your host, Dan Barrett. [00:33.5]

Dan: Hello and welcome to this week's episode of the “REI Marketing Nerds” podcast. As always, this is Daniel Barrett here from AdWordsnerds.com. How are you? Hope you are doing super well. Hope you are happy and healthy and doing what you gotta do to get through the weeks. Cause I, I've got to admit sometimes it's tough and sometimes it's easier than others. So if you are feeling stressed or anxious or just a little overwhelmed, look, you're not the only one, I got you, I feel you big time. And we're going to kind of reorient the podcast a little bit. Obviously we've been talking about things that people can do during this kind of economic downturn that we're in. And I'm going to be focusing on the stuff that I can help you with, which is connecting you with investors that are doing a really good job of kind of adapting to the current marketplace, connecting you with different kinds of technological solutions, whether that's for running the business or for marketing the business. [01:33.9]

I'm just going to basically try to connect you to as many interesting resources as humanly possible. So to kick that off this week we are talking to David Lecko. Now David Lecko is the founder of a really cool app called DealMachine. You can get there by going to dealmachine.com and dealmachine.com, it's basically an app that runs your entire driving for dollars operation. Everything from like you know, skip tracing the information on the house to sending the mail to sending a bird dogs. It is a really impressive piece of software and the thing that sort of made me want to talk to David specifically now is that driving for dollars, like online marketing for example, is a kind of marketing and it doesn't involve the mail. You don't have to like go into the house. It's something that you can do a largely, virtually, and in fact, entirely virtually if you're using Bird Dogs. [02:29.1]

And I want to keep highlighting this theme of pivoting into the current marketplace because I think, you know, in any kind of period of, of disorder or disruption; we see a lot of upset. We see a lot of things that have always worked, “Always Worked.” And we've all got to recreate and reinvent and figure out what's gonna work for us right now in the world that we actually live in. And I think David has a really interesting kind of product. And look what, whether you use his particular product or not, I want you to start thinking about what are the ways in which you can leverage technology in order to not just survive during a pandemic, but thrive and come out of this as bigger and stronger and better than you were before. So without any further ado, let's get into this week's interview with David Lecko from dealmachine.com. Alright, Tthis is Daniel Barrett and I'm here with David Lecko from dealmachine.com. David, how are you man? What's going on? [03:29.8]

David: Hey, I'm doing great. We're in the middle of this zombie apocalypse; it's the closest thing that has ever happened, like in a zombie apocalypse. The streets are empty and we're still out driving for dollars.

Dan: Yeah, it's, it's a, we were just talking about this, it's like a profoundly creepy vibe to everything.

David: Hmm..hmm.

Dan: And especially as the weather gets warmer and there's like nobody outside it increasingly feels like, yeah — Weird! So yeah, very, very odd time. But, so you kinda, you kind of mentioned this, so like DealMachine. I want you to kind of take a minute, we'll come back and we'll talk about kind of like personal stuff. That's kind of usually what I'm most interested. Right? But you mentioned driving for dollars for people who aren't familiar with DealMachine. Kind of give me the, you know, the, the elevator pitch for what is DealMachine. If I'm an investor, why do I care? What does it do for [04:22.4]

David: Sure. Yeah, DealMachine helps real estate investors get more deals and build and master their lead source from a street team. So they've got, you know, you can buy any type of lists online except for a list of distressed looking homes. That is a list you have to actually build yourself and because you can't easily buy it online, the ROI of that list is so much more higher, like three and four times higher. And so DealMachine helps you build a street team at scale for these large operators actually build a consistent lead source from the distressed properties. Oh no, no. Your audio cut cut out. Something happened. [05:00.6]

Dan: Oh no. You know why it cut out.

David: There you go.

Dan: Because I muted myself— like an idiot!

David: Okay… alright.

Dan: Its that kind of, that's the level, that's the level of professionalism I bring to this podcast.

David: Heh!

Dan: Ahhh…so I was saying, so deal machine is, it's like the app that I used to coordinate between everybody, like kind of how does DealMachine kind of fit into the like an average investor?

David: Yeah…so there's a map where you can tag a property, see who owns it, and send out a piece of mail from the app. You can also recruit drivers through our landing page and get them to sign up under your specific account.

Dan: Hmmm.

David: With instructions on exactly how to go about adding properties, how you're going to pay them and packaged up for them, and an experience that lets them just onboard and start providing value to you without having to do a bunch of training.

Dan: Yeah, I think if, if, if anyone's listening to this they’ve never seen it, it's a very slick kind of experience, it’s very cool. Like I liked how kinda integrated everything is. So that's what DealMachine is. We'll come back to like how people are using it and, and how it fits in now because obviously it's a very different world now than it was six months ago. So I'd love to hear your take on all that. Let's, let's kind of take a step back and like, so what's your role in DealMachine and how'd you get started? Like what, what was your entry into real estate investment? [06:14.5]

David: Sure. Yeah, so I'm actually the CEO of DealMachine. I made it for myself in 2016 to help me get my first rental property. And so I was working a software engineering job wanting to invest my income outside of the stock market and in real estate so I could build a portfolio of rentals that would be predictable income.

Dan: Yeah.

David: And I was looking for my next deal, my first deal. And so I actually was driving for dollars and I was struggling with the follow-up process. I wasn't actually going home and sending the letter out immediately and I wasn't, certainly, wasn't repeating the mail to them on a good schedule because I wasn't even getting the mail out in the first place.

Dan: Right.

David: So I built this app for myself, it was very basic in a weekend to start tagging properties on a map and have it send out mail automatically; so that's how it all started. And I, I just closed on my eighth rental last Friday. So I am really excited about that and building the rental portfolio still, even though deal machine is my full time dedicated, you know, job now. [07:15.7]
Dan: Yeah. So it's interesting because you, you obviously have the tech background, right? So it's like it makes total sense, like you're scratching your own niche.

David: Hmm..hmm.

Dan: What made you drive for dollars originally? Cause it seems like, so you're so like I'm a computer guy, you're a computer guy, you're way more technical than I am, I’m sure; but ahmm and I don't invest, right but it, my whole people always ask me like, well, “If you are an investor, what would you do?” And I'm like, well I would do what my strength is. Like my strength is online marketing. So that's what I did. Right. Everybody's got a different set of strengths.

David: Hmm..hmm.

Dan: So for you being the computer guy, what, what attracted you to driving for dollars originally? Was it, was it that you thought the RI ROI would be that much higher? Like why driving for dollars? [07:57.0]

David: Well, to be honest with you, that's what everyone's advice was, is go drive for dollars in these areas. I wasn't getting a lot of other advice about doing much else and so I just was following the advice everyone was giving and then I just made the process, you know. So I had a better chance of success and that was through the tool that was going to handle a lot of the stuff that I was dropping the ball on, like looking up the property owner and getting that mail out and then repeating the mail.

Dan: When in the process did you feel like, Oh, I have something here that other people are gonna want to use? [08:27.5]

David: Yeah, it was when Brittany from Alpine properties gave me $1,000 so they could try it. And I was like, wow, that's like a lot of money. And she was, she's buying 30 houses a month in Indianapolis. She doesn't even live here. And that's when I realized it's something that is more than just me that I could serve. And that was like the first time I ever made real money outside of a nine to five job and it was not a, not even a problem.

Dan: Yeah.

David: Like…that that told me there's a need there and that's why I decided to spend some more time on it. Early 2017 is when I put it on the app store and then brought my partner on Dave to actually make it a really good app.

Dan: Yeah.

David: You know, from what I had created for myself, which was just super basic and not very user friendly. [09:14.4]

Dan: So you guys went app store in 2017 so what was that? Was that process particularly difficult for you? I, so I don't know. It's fun about software development. I'm very interested in it from the outside. Right. I've heard that the app store, like the difference between getting an app on the app store, we're talking about the Apple app store, right.

David: Yeah.

Dan: Versus like for example, just putting it on the web or something. It's, it's significantly more, there are a lot more hoops to jump through, at least that's my impression. Is that what it was like?

David: Yeah. I mean on the Apple side there's definitely hoops to jump through, especially with how you charge customers.

Dan: Hmm..hmm.

David: And so initially we didn't have any issues because we just kind of fit in that group. We did it right. We kind of knew about it and we did it right.

Dan: Right.

David: But there was like a, probably a three month period where we were going back and forth with them about, you know, the billing stuff and yeah, it just takes like a few days to like actually get any updates posted because there's a review process on Apple. But it's really not too bad. [10:14.6]

Dan: So if you were going to go back in time, knowing what, you know now, you're going back in time, you get a chance to rebuild DealMachine, would you do anything differently or would you do it the same way? You're like, look, it's kind of just the way that it is, or would you, would you go and approach the development process?

David: Well, no, I wouldn't have done anything differently. And my goal for actually a really long time was just like, I'm doing this, so get me a rental property and

Dan: Right. [10:41.0]

David: I don't care whatever happens to it after that, you know, and it's achieved that success and so by that definition, you know, it was all of the success that I ever wanted from it. And it did more than that. So everything after that was just fantastic. And that was a great way to set myself up too, because I feel like a lot of people get stuck in is I like trying so hard to start a business for the sake of starting a business.

Dan: Yeah.

David: And so I really just didn't have to like stress out about that, you know?

Dan: Yeah.

David: I was just doing it cause I wanted it.

Dan: Yeah, exactly man. It's like, this is, I have a friend this guy Dan Nicholson who says something very similar where he's like, Oh, if you're thinking about a business, it's got to pass through these kind of like filters that he has. And he's like, you know, is it, is it a time saver for you? Is it a money saver for you? Right. So it's not even like does the market want? And it's like, even if no one wants it, does it sort of save you time and money? Right?

David: Yeah.

Dan: Or is it a forcing function to get you to a certain point, like skill level.

David: Right. Yeah. [11:39.9]

Dan: It makes a lot of sense that you did that and then it it kind of like, just, just like you said, it takes the pressure off. You're like, look, if people want it, that's awesome. Somebody, somebody asks you to, you know, they're like, can I give you $1,000 it was probably a pretty good sign. You know what I mean? Like, you know, that's a pretty good indication that the market would want it. But no matter what happened, you already have your application for it, right? Like you want to go get, you want to go get property. So let me, so let me ask you, so for someone from the outside, and I'm sure like a lot of investors listening to this do driving for dollars, they know it backwards and forwards, right? But if you were going to tell somebody like, you know, so let's say you're, you're talking to me, I'm an idiot. And I'm like, okay, driving for dollars, I don't really get it. Does that basically just mean I drive around and look for houses that look crappy? Like, what's the process for just even getting started in that kind of thing? And if I'm, if for example, if I'm new to driving for dollars, is that something that will kind of deal machine kind of walks me through like I don't know, how do I even start with that? [12:37.4]

David: Hmm..hmm. Yeah, well luckily a lot of people are already driving for dollars and we're just providing a tool to make what they're doing easier.

Dan: Yeah.

David: But there's definitely people there out there that don't know what driving for dollars is. And for those of you, it's just when you're looking for a physically distressed house, nothing else, you're not looking at the owner type, you're not looking at anything else, but is this house physically distressed in a way that makes it worse than the rest of the houses on the block? So you're just looking for signs of distress, that could be peeling paint, it could be stuff, full mailbox or like tall grass or even in a really nice neighborhood. Maybe it's the guy who doesn't trim his bushes and it's just like an indicator that something is out of place. And that's why that's what you're looking for. [13:19.7]

Dan: That's interesting. I never really thought about it as it's relative to the neighborhood itself. Right. Cause you're right, it's like, you know, some houses, your house basically has to be on fire in order to be distressed compared to everybody else.

David: Yeah…yeah.

Dan: And then in other neighborhoods it's like, wow, Don didn't like rotate his lawn Flamingo this week. Like.

David: That's right.

Dan: It might be dead inside, you know, or whatever. So that's, that's really interesting. So, okay, so let's say, let's say I'm using DealMachine, right? If you could contrast for me, so what an average driving for; someone who's not using DealMachine, if I'm going driving for dollars, what that process is like kind of start to finish and then what, where does DealMachine come in? What does it do for me? It makes it easier, better, whatever. [14:02.2]

David: Yeah. So the normal process is look for the houses, write down on a piece of paper as you driving by and go home and look up the owner on the County website, then put together all those owners and send a piece of mail to the owners. And then drop it off at the post office and unless you've got 200 plus, you can't send that out through a service. You've got to do it by hand because most mail houses have a minimum.

Dan: Okay.

David: So that's, that was the original problem that DealMachine solved for me was I had like 40 some odd properties and I had them on my list for like a month plus, but I never sent anything out because I just didn't have enough to get them out. And then it was, I had a process to do it at home, but it was just very time consuming so I didn't do it. Yeah, so that the app does all of that with a a map. You tap the property, you who owns it, you could send them a piece of mail from the app and it's custom design, it features the photo of the house that you took and then you don't have to think about it. It's just going to follow up and you go out and look for the next house and just add it to your list. [15:03.9]

Dan: Wow, that's awesome. Okay.

David: Thanks.

Dan: So when someone signs up, do you have all that data, like the owners and stuff? Is that all already in the app?

David: Yeah.

Dan: Or when someone's, if I do, I log in and say like this is my market, can you add my data?

David: Yeah, it's definitely already all in the app for you.

Dan: Wow, that's cool man. So did you

David: Anywhere in the United States.

Dan: Yeah, that's fascinating. So do you think so you know, you see a lot of, you see a lot of people coming into it that they're coming into DealMachine from having to kind of do it the manual way. You mentioned follow up before, follow up is probably one of the most commonly recurring themes I would say in this podcast. I have done this for like almost two years. Would you say that the biggest problem that you solve or or maybe let, let me put it this way, the highest impact from that you solve for people is just that they don't follow up on a consistent basis with the people that they, think they're going to follow up.

David: I definitely think that's the number one issue. [15:59.8]

Dan: Yeah.

David: Yeah.

Dan: How many, like for this kind of league, right, so driving for dollars, you know, the house is in a certain state of distress, but like you said, you don't know a ton about the person. Right. So how many touch points do you think you need for a given person before, if they're going to respond, they respond, right? Do, do I need to send this person like two pieces of mail, 10 pieces of mail? Like what's the, what's the pattern there?

David: Yeah, I think that there is a lot of literature out there about sales that says minimum eight times. And that's not real estate specific, that is every single sales material out there is going to say minimum seven, eight times. But we always say a minimum three and just because I think that's easier for people to swallow then you know, and then we bump up the number of houses you have to find to like 200. So find 200 houses, mail them at least three times and if you, you, you get a response from that you're, you're probably going to from what we've gathered from all the testimonials and reviews, but you should most definitely keep repeating mail to those houses more than three times. You just kind of say, hey, this is a good baseline, a minimum amount of work, If you will, that you need to commit to it. [17:15.8]

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Dan: Now a part of the DealMachine that I, I'm interested in and I think it's kind of fascinating as the whole street team kind of idea where, you know, you have people that are, I mean, correct me if I'm wrong, it's my perception of it, right? It's like people are essentially acting as bird dogs. They're doing the driving for dollars for you, right instead of submitting the properties. So can you tell me a little bit about like how people typically set that up and how it works? [18:12.0]

David: Yeah, so usually you'll find somebody on Indeed or a Meetup and you'll pay them to go look for houses for you. Well a lot of people like to pay per deal closed, the problem with this is, none of your drivers are ever going to stick around because you know, it takes you three months to close a deal a lot of times cause you've got to get all this follow-ups in. And so I really push people against doing the pay per close deal and I would prefer to say paper hour, $15 an hour or is a say a salary that somebody is really going to appreciate because it's the type of person who uses driving Uber right now. But that pays unpredictable because, well, one, there's not many Uber riders right now and when they are in a normal, you know, world state, it's, it's always fluctuating, but you're going to provide a guaranteed $15 an hour and you're going to pay less overall than if you pay up thousand dollars per closed deal anyway. So that's, that's my recommendation. You've got some folks that pay like per deal added as well. [19:13.7]

Dan: Yeah.

David: And, you know, a dollar to $3 is what I see for that payment structure.

Dan: You know, it's really interesting then because if you think about right now we're talking about, you know, we're in the middle of the pandemic as we're recording this, you're in Indianapolis, I'm in Connecticut, right? [19:27.5]

We're both on lockdown. And you think about right now, so many people are out of work and there are so many people doing Instacart, Uber, Uber eats, DoorDash, that kind of thing. Right? But you think about, you know, Instacart's maybe like the most extreme that person's making, whatever they're making, not a ton plus whatever they're getting for tip right. In there it going out in public and exposing themselves to who knows what. Right. And I'm like, well, you know, some people think you know, COVID-19 is not a big deal, it's like whatever you think that there's some level of risk there that you're not incurring otherwise. Right. So it's like the nice thing about doing the kind of thing that you would do driving for an investor is you're just pretty much stay in your car. You don't have to go to like the milk aisle where there's like the dude, you know, you know, vomiting zombie juice all over the place. [20:20.0]

David: Right.

Dan: and like you can, you can…15 bucks an hour is pretty darn good. That's more than I made tutoring, that's more than I made tutoring the SAT in the year 2000 or whenever it was. So that's, that's pretty awesome. Right?

David: Well you have some expenses, you're going to be driving your own car.

Dan: Yeah.

David: You know, paying for gas.

Dan: Yeah.

David: I mean I also think it's good, especially right now during the pandemic that people are virtual, you know, doing other virtual things like paid ads. Are you guys seeing an uptake there?

Dan: So it's interesting. I mean if anything, I think we've seen, so there's a, in general, there is an increase in total search volume, right? So there's more way more people online. There's a slight decrease in conversions. And I think there's a, there's a substantial decrease in cost. Cause I think a significant number of investors are, you know, it's like in any market when people get uncertain, people they freeze up, right?

David: Yeah.

Dan: So it's like if you're, I would say it's like, you know, if you're walking in the dark basement here, you go down there to like, you know, hear noise and you go down there and there's no lights and you know, all of a sudden you hear somebody go like, ahhhh ahhhh, you're like freeze up. Cause you were like, hahhhh haaaa you know, it just, that's the evolutionary instinct.

David: That's right. [21:29.7]

Dan: And similarly, like economically it's what people do. Like they're not sure what the, you know, so they tend to like hold on to cash, right. That's what people want to do. And the problem is like, you know, first of all, I totally get it. I'm not judging that at all. I'm like, maybe that's the right move, maybe it isn't. But the problem is if you don't fill your pipeline, you know, because you're worried you're not going to have deals in two months. Well if you don't fill your pipeline now, you won't have deals in two months. It's just how it is. Right.

David: Right.

Dan: So, you know, I think a lot of investors right now are holding on to cash. What that means is that for the people who are staying in the markets, like all our clients are currently staying in the market costs are actually coming down for the same number of leads. Right? So it's, it's you know, there's pluses and minuses to it, like anything else. But yeah, I think doing stuff virtually and you see, I think I've seen a lot of investors kind of moving to, you know, having the seller take pictures of the house and then like reimbursing them for that. Right. And things like that. So it's like, or saying like, we don't actually need to visit the house.

David: Hmm…hmm.

Dan: In order to make an offer on it. Right. Stuff like that. [22:29.0]

David: Yeah.

Dan: So it's been, it's been pretty interesting.

David: Yeah.

Dan: I mean, what about, so like have you seen like an increase in people interested in driving for dollars? Is it is a kind of steady, like what, what are you seeing in terms of impact of all this kind of economic concern?

David: Yeah, well we actually released a virtual driving for dollars module that lets you cruise around on Google street view and add properties from your computer that way. So that's actually something a lot of people are turning to. We've had a a thousand people hop onto it since about two weeks ago since when we.

Dan: This is like a part of the app or it's like a course that you taught or.

David: It's a piece of technology.

Dan: Yeah.

David: That is a Google Chrome extension that you use while you're on Google street view.

Dan: Hmm.

David: That's cool. [23:11.3]

Dan: Oh, I get it.

David: Yeah.

Dan: So then you can cut, you can kind of look around, you can take a picture of the house and then you can like mark it in the app essentially and, and you use that to start plugging your mail into?

David: Yeah, it's a Chrome extension. So it does a lot of what the app does while you're out on the actual street except for it does it in your Google street view. So.

Dan: Yeah.

David: You know, walk around on Google street view and add that house, skiptrace them to call them or you know, get the owner's name right there and send mail. So it's like, it's a Chrome extension, browser extension that comes out from your you know, browser extension bar up there on the right. [23:45.51]

Dan: Yeah. That's awesome, man. That's a super good idea. Yeah. I'm curious like what do you think, so you're, you're on the technical end of end of things, right? But you also have your hand in real estate investing. I'm curious, what do you think all the fallout of this, let's say five years from now is going to be, because to me it seems like this was a very big push and not just an investing, but in many parts of the economy, right? A very big push towards doing stuff online, doing stuff virtually cloud hosted stuff. I mean you just, you see like the number of people who are suddenly realizing, Oh, I could work from home. I could have always worked from home. You know, so and I'm, and I don't really know if it's when all this is over, we just go back to normal or when all this is over there's this lasting effect because now we just realize all this stuff is possible. I'm curious what you think that fall is going to be for real estate investing. Are we moving towards an era of real estate investing where way more stuff is virtual and all this stuff is just normal? Or do we just go back to business as usual? [24:53.0]

David: I think we'll probably go back to business as usual. Maybe a few more people will do virtual stuff, but there there's already people out there doing like we're in collective genius, right? We're both, we both are. And so there's 130 people there that are doing like 50 deals a year or more. There's a number of virtual people there, so I don't think it's like a secret that you can do stuff virtually. I think right now people are figuring out, you know, that they can do it. I don't think there's a replacement for, for those people that want to do it in person. I think you'll just like that, you know, a lot of the guys that do it in person have chosen to do it that way. So I don't, I don't necessarily think that's gonna really affect us, hmm too much. Same thing with like, people realize that they can work remotely now, but I mean, I don't think people like love it, I think most people are really excited about going back into the office. [25:44.7]

Dan: Yeah, yeah. That's very true man. It's like a, I never thought I would miss like Starbucks so much.

David: Hmm…hmm.

Dan: And now I'm like, I can't wait to see, you know, Frank the barista again. That's gonna be nice. You know? That's really interesting. So let me ask you, I have a secret fantasy. Okay. We're going to get, this is my confession. I have a secret fantasy that I'm going to develop a piece of software, software as a service.

David: Ahhh…haan.

Dan: To me it's, this has been one of these things where I think because I've run an agency for so long, we've been such a service business, I'm very attracted to the idea of like the software that you pay for, right? [26:25.7]

But in my head, the flip side of that fantasy is this nightmare where it's just a constant never ending stream of like bug fixes and everything's broken all the time and it's a nightmare.

David: Hmm…hmm

Dan: So what is it really like for those who are listening are curious, what is it really like to run a successful software as a service business?

David: Hmm..hmm.

Dan: Is it just like you're on the beach, you're sipping Mai Tai's, you know, you'd never have a care in the world. Or is it like hunched over the computer or sweating at four in the morning because everything's broken or somewhere.

David: The second one. But yeah, the, the SAS business model is a great, great business model. I think the grass always looks greener on the other side. With technology, there's very little that you can actually patent. And every single other person who sees you being successful is going to copy exactly what you did. And so you are always making it better. You're always investing on, you know, making it the absolute best. [27:23.7]

Dan: Hmm..hmm

David: And if you chill out on the beach too much, you're not going to really have a business anymore and you're going to have to get back to work. So, you know, in my experience we've just been hunched over the computer the entire time, if not that we're out doing a real estate deal and I'm really proud of that and we're continuing to just re-invest there and make the product evolve and fix bugs because that's the thing that you don't think about is it can be very exciting and easy to get up, like version one and it happens very quickly. But then when you go to add this, that and the other thing updating, it creates bugs and there's really no way around that because the more you add to it, the more complex it gets and the longer it takes to then add to it in the first place. It's just weird, like I've been through several products, you know, and it always surprises me. You know how things really slow down once you get to be a certain size.

Dan: Yeah.

David: But that's just part of the game. So it just like passive income with a rental, you know, it's not truly, if you treat it as true passive income, it's a, you're going to be a distressed property owner who has to sell for a discount. I feel like it's..

Dan: Yes, it’s like driving by your house and hits it on DealMachine and will be like what's up? [28:36.1]

David: Yeah.

Dan: It’s true.

David: I'm not saying passive income is not achievable. I just think it takes a lot of time, a lot of building and a lot of work to put it in place. Buying a rental property and forgetting about it isn't the answer, but building a business around a company that builds rent, that buys rental properties and manages rental properties that eventually has enough systems that are so good that they run without you. That is more of a possibility. But that's just not something you do overnight or in a year.

Dan: Yeah, I really liked the whole thing of like, you know, passive income. It's like if you really want the income, it's not passive and if it's really passive you'd probably want too much income for too long. Well, so let me ask me, cause you hit, you hit on this and I want to end on this because in a recent podcast episode it was talking about kind of how marketing for investors is changing and how investors relate to their markets is changing. How the investors relate to sellers is changing. You said this thing is really interesting. I think there's a very clear kind of parallel. You're saying it’ll look like when you, when you do software, cause you can't patent it, so it's like when you do a successful thing immediately people stop, start copying you. Right. [29:49.2]

David: Hmm…hmmm

Dan: And likewise, investors for any investor in pretty much any market, they're competing with a bunch of other investors who have very similar business names probably. And you know, very similar websites and everything's very similar. Right. So how do you think about in a world where, look, everything you could do can just be copied, right?

David: Hmm…hmmm.

Dan: How do you think about becoming the, the sort of dominant player in your field where people choose to work with you because they view that as the best possible option? How do you, how do you engineer that or, or make a process around making that happen? [30:25.5]

David: Yeah, well it's always a work in progress, but you know, I think there's a few different things. I think the thing that everyone always jumps to is we will have the absolute very best customer service and they believe that that is their, the thing that makes them stand out. And I would say that's like very, very important piece, but it's the thing that everybody says, so I've got to believe, well that can't be it. Or maybe people just aren't executing on it as good as they say they are, you know, so, but what I think is on the product side its just like, it's very easy to do like 80% and pretty much everybody can do that. But like the thing that just makes it so good is the last 20% that takes just as long as it did to build the basic version of this thing. But it's all in like the little details about like, well, when I go back, does it take me to where I was on the list previously or does it just reload the whole list and I've got to re-scroll the whole thing.

Dan: Oh my God, one of my biggest pet peeves in any application. Or web application to work anything that thing of like you just go back and all of a sudden you're in a different place.

David: It's terrible.

Dan: Yeah. [31:33.1]

David: As the product matures, like there's just so many edge cases of little bitty frustrations like that. And I think that that is what I view is you just need somebody who's who's able to be really talented in that area. And then as you grow, you know, you've obviously got to scale that ability too. So I don't really don't have the answer because you know, we're only 14 people, but I know as we got, as we get bigger, that's going to be a really, it's a really tough thing to hire for is somebody who naturally like sees those things and does those things. You can't coach everyone to do that as you get bigger because then you're only spending your time coaching and then you've got no left, no time left to do anything else. So it's a really tough thing to do. But I know how important those things are. And so for me, like it's just been something I've been willing to pay a lot for in terms of like, you know, development talent. [32:24.5]

Dan: Yeah. Well I think that attention to detail really shows, especially in this market, I think it makes a big difference. And yeah, David Lecko so if you guys are interested, you've been listening to this, you want to check this out, the website is dealmachine.com should definitely go check it out. Can they find you in the app store too? Or should they just go online?

David: App store is

Dan: Okay, yeah yeah…Google it in the app store as my mom always says.

David: That's hilarious.

Dan: They’ll figure it.

David: Shout out to you mom.

Dan: Yeah, seriously. I've mentioned my mom way too much on this podcast. She’s a sweetheart. Barbara, I love you, if you're listening to this, you aren't because you have better things to do, but I appreciate it. And David, thank you so much man, this has been super fascinating and I really appreciate you kind of opening up about the whole process and everything and yeah man, thanks for doing what you do. It's it's much appreciated.

David: Oh really appreciate having me on Dan. Thank you very much.

Dan: Cheers.

David: Cheers. [33:19.0]

Dan: That's it for this episode of the REI Marketing Nerds podcast. As always, if you need someone to talk to about your marketing, you can hit us up at AdWordsnerds.com/strategy that's AdWordsnerds.com/strategy we are happy to get on the phone with you and talk about what we are seeing in your market, what other investors are doing. This is purely a ‘Be helpful’ kind of campaign for the community that has supported us for so long. And look, if you've listened to this podcast, you know, if it's your first episode of it's your hundredth episode, just know that I appreciate you. I appreciate you listening. If you liked the show and you got some value out of it, give us a light. Give us a subscribe, give us a review. I read every single one and I just want you to know that I hope you are happy and healthy. It's safe that just stay that way while growing your business at the same time. I'll talk to you next week. This Daniel Barrett from AdWords Nerds signing off. [34:10.58]

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