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Many new real estate investors think cold calling is a cheap and easy way to talk to qualified sellers and close deals.

But what you don’t realize is that cold calling is ineffective, it’s more expensive than it seems, and it can create legal chaos, causing more problems than it solves.

In this episode, I’m going through the three main reasons cold calling sucks so you don’t get sucked into a trap that could destroy your business.

Here Are The Show Highlights:

  • Why cold calling is a tremendous waste of time and what to do instead (2:54)
  • How blood-thirsty lawyers harass business owners like you until they find violations they can feed on that will ruin your business (4:02)
  • The hidden costs of cold calling that could kill your business (4:53)
  • How your VA is costing you up to $40,000 dollars every time they press dial (5:04)
  • Why you’ll never close a client by chasing after them and the trick to make them chase you instead (9:28)
  • Are you willing to call 2100 people to close one deal? If no, try this instead… (10:19)

Wouldn’t it be nice if sellers were chasing you instead of the other way around? Not only is that possible, but I created a free guide that explains it all for you called The Social Media Blueprint. Download it now at http://socialmediablueprint.com/podcast

Resources mentioned in this episode:

16 Compelling Statistics That Prove Cold Calling Is Dead by HubSpot

Top Class Action Lawsuits

Ringless Voicemail is Illegal in Florida

Do Not Call Compliance FAQ

Read Full Transcript

The big challenge is this: How are investors like us who are not backed by a billion hedge fund who are investing money from our own pockets? How do we buy, sell, and invest in the properties we believe in, yet still make a profit without risking all of our own money? That is the challenge. In this podcast, we'll give you the answers. My name is Nate Armstrong and welcome to the social media blueprint.

Hello and welcome to cold calling is brutal here in the SMB podcast. I'm joined by my cohost, mr Bianco Armstrong. All right, so Bianco and I are going to talk about how cold calling is brutal and I'm, this is exactly why dad doesn't do it. I've done it before as a real estate investor, but I do not do it anymore and there's some real reasons for this. There's three big ones today; we're going to cover what the TCPA is.

(00:49): You might say, well, what the heck is the TCPA? You definitely need to know if you're a real estate investor considering cold calling or doing it now where she at and you've got to know what the TCPA is. You've also got to know about the do not call compliance and what it really costs to do cold calling. Okay? The third thing that you got to know about is that cold calling sucks and I don't mean to sound derogatory or anything like that, but it's just the reality. So we're going to get into it today. All right, you ready to not rock this thing out? Here we go. Okay, so let's talk about the TCPA. The telephone consumer protection act originally established in 1934 updated in 1991 and amendment basically says you can't do robocalling, you can't do ringless voicemail. You can't, it doesn't say it in those terms because those things weren't invented back in 1991 but the language of the law basically prohibits them.

(01:46): Okay. Some States have updated it since then. Like back in 2018 Florida took the big slap and ringless voicemail is completely outlawed. You can't do it at all. And so there's places out there, like if you go to top class actions lawsuits, I'll link this in the show notes as well, but if you go to that website, you'll see that that telephone consumer protection act basically outliers in band, some of this bigger call center type stuff. In most successful real estate investors that use cold calling, they don't do it one call at a time because they know some of the stats that I'm about to teach you. What they do is they do more of the robocalling. They do more of the higher a sales floor to make thousands of calls per day for them. And let's face it, the average investor like you and I, we're not going to do that in our business.

(02:33): We're not going to go hire some big sales for, we're going to start off doing things ourselves and then eventually we're going to hire someone to come in and replace what we're doing. But the reality is is that this cold calling stuff has potential consequences. Let me get into some of this. Okay. So if you go to HubSpot blog, that hubspot.com and you look up some of the stats and cold calling, you're going to see this, I'm going to link this in the show notes, but 1% of all cold calling turns into an appointment. 1% that means you got to call a hundred people to get one person to answer the phone. That is brutal. Brutal. Okay? Next, only 20% ever answer or call back. So that's a lot of either rejection or no callbacks. Okay? And the next big stat that you'll find on their, their blog is that 90% never get to the actual decision maker or makers.

(03:24): So that means that they call, and maybe it's the wrong number, maybe it's a daughter, a niece, a spouse, but you never actually get to talk with both decision makers during this whole cold call process. Now, I confess, I have made mistakes of this before myself. I actually used to do ringless voicemail in the state of Florida before I found out that it's actually prohibited. And as soon as I figured that out, I quickly stopped doing it because I don't want to get any kind of trouble with anybody. No Wade knowhow. Okay. Especially when I tell you what the fines are and just a little bit here. Okay. I've also watched a mentor of mine, literally, he's one of the most influential real estate investors in the country. And he gets harassed right now by people that intentionally and predatorily try to join his lists, his texts, lists, his email lists, et cetera, to try to find violations, violations of what he might be violating in the TCPA or some of the other text message lawsuits.

(04:22): And they literally, like I saw, he got two in one week, two different people in one week trying to predatorily go after him. And what, what happens, there's like this whole black list of attorneys and law firms that intentionally try to do this. So they try to get added to your email list, your texts list, your cold call list, et cetera. And if you violate something in one of the laws, then they file a suit or they threatened to file a suit and they tried to take ransom money from you. Scary stuff like just not worth it to me at all. Okay. The next thing is that cold calling is very costly and I'm going to point it out a couple of different ways for you. Number one, if you go to the do not call compliance list, it's do not call compliance.com you'll see on there every state's a little bit different on this, but some States like I found one state that it's a $16,000 fine per occurrence.

(05:11): If you are told to add a number to the do not call us and you happen to call them again. So just imagine you're a newer real estate investor. You get going on this and you hire a VA, the VA is making calls for you or maybe you got a call center making calls for you and someone says, add me to your do not call list. And then that someone forgets to do that and then the next day someone else calls the same number. Guess what? Guess who's actually liable for that violation if they decide to go after it. The business owner, the business owner. Now you might argue and say, well, I've got a contract with the call center or the VA, but let's just say it's a VA or it's your assistant and ultimately it's going to fall back on the business owner. In most of those cases, I would not want to be on the receiving end of that $16,000 fine.

(05:55): I found another state that it's 40,000 occurrences. 40,000 no, thank you. That's insane. We're not talking about a speeding ticket here. A speeding ticket maybe on a bad day is a few hundred dollars maybe if you're doing like double the speed limit, maybe it's 1000 bucks, but this is 16 grand. It's just not worth it. Cold calling is more expensive than most of the other sources. Let me prove this to you another way. We talked about this earlier, but HubSpot proved to us that 1% of all the calls that we make cold calling turn into an appointment. Okay, so it's one out of a hundred is the simple math on that. I found a couple other sites out there that said that it can be up to 2% but let's just say it's 1% okay. Even if it's 2% that's a lot. The average real estate investor, especially the newer folks who need a little more practice, they typically need 21 real leads or 21 appointments before they're going to get a real estate deal.

(06:48): Okay? Now it's not everyone needs that many. I've got a gentleman that we work with right now. We help with his marketing that literally he takes three. If you get this guy on site with three sellers and the three seller appointments turns into a deal for him. I'm also not saying that everybody can do it in three. Some people take 21 K some people take more than that. It all depends on skill level, things like that. But let's just say that we go with this average to be conservative. That is 21 appointments. If I wanted to generate 21 appointments from cold calling, that means I have to call 2100 people. How long does it take the call? 2100 people. That's insane. Totally, totally insane. In and for me, like if I compare it to social media ads, which is my team's expertise, we run social media ads for real estate investors to get leads and now what we get is like on the high end, we might pay 40 bucks for a lead.

(07:42): Usually I'm paying somewhere in the tens to teens, sometimes in the 20s and not talking about like junk leads. I'm talking about sellers that want help. I just had a Nashville, Tennessee seller call me a few days ago that literally she said, Hey Nate, I saw your advertising. I've been following it. And well my husband died and I'm behind on my mortgage right now and I really need help. We got into it in the phone call. I almost heard tears coming from her. She didn't cry, but it was like really close in. I could just feel it on the phone and I was called to serve. I felt like it was my duty to help this lady out. So I first tried to refer to a realtor because I said, let's get you top dollar for the house. Let's do what's right. I'm a Christian Guy, so the Bible says take care of widows and children.

(08:25): So that was my first thought and she said, no, no, no, I don't have time. Three weeks from now we're up for tax tax for closure and I'm behind on the mortgage as well. So like I just don't have time to wait for a realtor. And I said, okay, I got it, got it. And I said, well, how much is it that you need? What do you need to get out of this to pay everybody off and put the money you want in your pocket? She told me the number, I ran my numbers and by the end of the day I had a contract tour for 10% more than she asked for. And then I additionally told her, I said, Hey, how about this? I'm going to get you 10% more, but additionally, after the inspection period, if we figure out that we can actually do better on this one, we're going to get you even.

(09:01): She was ecstatic, just totally blown away. Hate cold calling, can't stand direct mail, wish there was a way to have sellers coming to you instead of having to chase them down. Now there is, it's called the social media blueprint and you can get it absolutely free when you go to www.socialmediablueprint.com/podcast

(09:28): My point with this lead is that if you're not getting leads like that right now, something's wrong. You're doing the wrong thing. Trying to do this cold calling stuff that's so brutal like no thank you. You got to get sellers coming to you asking for your help. That's what you want and if you want help with that. Here's the thing, I'll give you my step by step training on this. Literally what we're doing right now to get motivated sellers coming to you asking for help and what you can do to get that is you can go to social media, blueprint.com/podcast social media blueprint.com/podcast okay. I've made the same mistakes that you probably have before. Like I've got prop stream, I love prop stream, but I've, I've pulled lists from it and I've done skip tracing and then I've called and called and called and you know what?

(10:13): Most of the time I never get calls back. Like I'll find this property that I really fall in love with and I'll skip trace it and then I'll call in and it's just like such a, I do all this work just like calling someone that might call 2100 people to make one deal happen. Like if I can instead spend $40 to get a lead from a seller that wants to work with me and I don't have to call a hundred people, my time is, we're so much more money, so much more money. Okay. The first time that I ran Facebook ads, I also had the flip side of the Facebook ads is the first time I did it. I had no clue what I was doing and I spent a lot of money. I spent hundreds of dollars to generate some leads and I didn't know what I was doing, and then I got help and then I figured this stuff out to make it work really, really good.

(10:55): Okay. Now the third point I want to talk about is this. I want to talk about why cold calling sucks, and I'm sorry to sound so like bad with that word and whatnot. I'm usually not a negative person. I'm usually pretty upbeat, but the reality is that it does. It just sucks and there's not a replacement word for it. Okay? If you know the famous quote from Mr. Albert Einstein, it's that the definition of insanity is doing the same thing over and over again expecting different results. Now, my problem with cold calling and why I say that it sucks is this. There is a this rejection curve that people have to go through. Literally like HubSpot stat, 1% of cold calling turns into an appointments and we know that it takes a lot of appointments to get one deal. You get rejected so often. Imagine being rejected by 99 people in a role.

(11:41): What does that do to your psyche? What does it do to your, your mental state of mind, especially as a new real estate investor, and I don't know about you, but I didn't sign up for real estate investing to just get rejected, to get told by people know, to get told by people. Add me to your, do not call this, never call me again. I did not sign up for that. No thank you. When I hear those negative things like that, it just gives me a feeling of hopelessness and the worst part is, is that I see some people quit. They quit the business, they quit their real estate investing business, which is deeper than that. That means a lot of them are quitting their dreams and I don't want to see that for you. I don't want to see it for me, not my family.

(12:22): I don't want to see you quit your dream because you chose the wrong path. This whole cold calling thing, cold calling sucks. It does. So please don't do it anymore. I've made the mistake of doing it in the past. I've also had my feelings hurt by some realtors in the past. I've made the mistake of making offers with realtors. I remember one of them, I, I went out and did a whole day of showings and I built rapport for a few days prior to that and did a whole day of showings and, and then when it came time the next day for submitting offers, I said, okay, I ran the numbers and all of them, I'm ready to submit seven or eight offers. And, and she's like, no, no, no, no. We do one at a time. Like, which one do you want to do? And I said, well, I kind of want to do all of them, but if I'm forced to pick one, I want this one.

(13:01): And then I told her the offer and she laughed at me. She laughed at me. She canceled her next appointment and then she never called me again. Like that's getting fired and rejected by a realtor. Right? Like I don't want that on a realtor front. I don't want that on a cold calling front with all these sellers. No, thank you. Okay. I've also made mistakes in my life, like changing my own oil. Okay. I laugh about this one, but literally to drive your car, you've got to get your oil change, right? But we all know that an oil change, some places with coupons and specials, you can get done for 20 bucks on the high end. Maybe you'll spend 50 or 60 bucks. Those guys and gals that work at those places, they've got the lift to lift you up. They've got the tools, they've got the oil, they're so fast, they're just in and out.

(13:41): They get the whole thing done in like 2030 minutes. Whereas it might take you or I a few hours to go to the store, get an oil filter, get oil, Jack it up. You have to dispose of the, like, it's just not worth our time. We know it's not worth our time and in this real estate business, we do know that we need to generate leads. We have to generate seller leads, sellers that want our help, they want to come to us, they come to us asking for our help. We need those leads just like our car needs, oil changes. But the reality is is that you don't have to be the one changing your own oil. You can have other people help you generate those leads. Okay. Especially when it comes to the whole social media thing, because a lot of people, they just get stuck like that tech stuff.

(14:22): It confuses them. I'm not talking about posting what you had for dinner and doing organic stuff, organic stuff. Let's face it. It just doesn't work. It's dead. I'm talking about running actual ads, running campaigns, building audiences, retargeting people, all of those kinds of things. So all this give you this. If you want the overview, if you want my actual training of what we're doing to generate the leads right now, then head over to social media blueprint.com/podcast I'll give you the whole thing. There's no charge. You can download it. It's a video that will actually show you what we're doing. Incredible stuff. A lot of people have taken that and I get a ton of emails, text messages and comments almost everyday from people thanking me for that. So while it's there, go ahead and grab it. Okay. Now the next time we get together, I got a really special show for you.

(15:06): The next time we get together we're going to be talking about something that's near and dear to my heart. First for today, we've covered a lot. We covered the TCPA, the telephone consumer protection act and why you should know it so that you don't get in violation of it. We've covered statistics like 1% of cold calling actually turns into an appointment. We've also covered the true cost of cold calling the $16,000 fine potentials that are out there and why having to call a hundred people to get an appointment really is more expensive than getting one lead from social media for 30 or 40 bucks. Okay. We've also covered all the reasons why cold calling just flat out sucks. Okay. So I don't want to beat a dead horse on that, but I want you to do this. I just want you to take action in your real estate business and not get discouraged by silly things.

(15:48): It's like cold calling. So for this time, we're done for next time on the next episode. If you've ever hired a mentor before but it didn't work out, you're going to want to hear this next episode. Bianco and I will be back for that and we are going to be ready to give you all the good stuff. So if you've ever hired a mentor before but it didn't work out, I want to give you the bullet points on what you can do to make things work for your real estate business. Okay? We appreciate you. We look forward to connecting with you again.

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