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DealMachine | The Ultimate Tool You Need to Find Motivated Sellers

Episode 155: DealMachine: The Ultimate Tool You Need to Find Motivated Sellers

DealMachine | The Ultimate Tool You Need to Find Motivated Sellers

David Lecko is the CEO of DealMachine — a real estate investing app that puts you in touch with any property owner via direct mail, phone, and email. Next time you are out and about and you see a house that looks abandoned or interesting, simply take a picture of it with the DealMachine App to instantly see who owns it. Then choose your contact method and get in touch with the owner and offer to buy it. DealMachine launched in the summer of 2017, and users report making as much as $25,000 over the last 4 months by looking for houses on their commutes that appear run down and contacting the owner via dealmachine and then selling the properties to an investor. Since using his app at least one user has quit his job with the income earned from using his app.

David turned to real estate to free up his time in order to create apps like DealMachine that solve real-world problems. On a mission to find financial independence, with a single real estate deal, David was able to reduce his living expenses to effectively $0 earlier this year, freeing up his time to quit his 9-5 job and work on DealMachine.

What you’ll learn about in this episode:

  • How to fully automate your house-buying systems
  • How spending $1.25 can make your business much more profitable
  • Reaching out to owners of the houses you want to buy, immediately!
  • Why automated letters, with follow-ups, help drive your business
  • Using the DealMachine app to help you grow your real estate business automatically
  • How to modernize the systems you have in place
  • Making more deals in less time with his app
  • How this data-driven app helps you learn which deals are worth pursuing
  • Is driving for dollars a completely outmoded strategy?
  • How to streamline your systems to grow your profit and efficiency
  • How the DealMachine mobile app is going to revolutionize and more fully automate real estate
  • Why some business expenses are more than worth their cost

Resources:

Transcript:

Mitch Stephen: This is Mitch and welcome to the Real Estate Investor Summit Podcast. I am so happy to have David Lecko with me today, and we’re going to be talking about an app that’s going to change your world. If you’re out there trying to find houses, this app is absolutely going to change your life, and I’m not kidding one bit. So hang on. I’ve got a word from a few of my sponsors. We’ll be right back with Dave Lecko. This is going to blow your mind guys. Stay with us.

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Mitch Stephen: Alright listen up boys and girls, have you tried skip tracing before but gave up in frustration? I do understand. There are a lot of skip tracing providers out there, but none of them are really helping to educate you on how to efficiently and effectively use the invaluable information you can get your hands on. But I have some good news for you. I want you to go to reinvestorsummit.com/skiptrace and let my friends there help you solve this problem. They are not only a provider of great skip tracing information, including phone numbers of all kinds of information, but they’ll also help you understand the different techniques and strategies to use and get the most out of that data.

Let’s face it, you can have all the data in the world. You can have the best data in the world, but if you don’t know how to use it, it’s useless. And let me tell you this, if you’re not skip tracing, now you’re missing out on a ton of great deals, the best deals in the business. So go to reinvestorsummit.com/skiptrace and learn from this one of a kind service and get started finding those deals that no one else can find. Reinvestorsummit.com/skiptrace.

Alright this is Mitch and I’m with David Lecko. David, how you doing today?

David: I’m doing so good. How are you Mitch?

Mitch Stephen: I am doing great. And what making my day is, is this app you’re fixing to talk to us about. But before we get to this, I want people to know a little bit about you and your background. I always do this every show. We need to know who we’re talking to. Who is David Lecko? Where’d you come from and how’d you get to this point right here talking to me?

David: Heck ya. Well, I live in Indianapolis, Indiana. I’m 28 years old. I first got into real estate after reading, “Rich Dad, Poor Dad,” attended some local meet ups, and I began driving for dollars, looking for my first property to wholesale. Basically, I just struggled to keep track of all my pieces of paper on my car. I would lose them. I’d come home, forget to look up the owners. And so, I was a software developer at the time, so I just made this app that does all of that legwork for you while you’re in front of a house. And also, I was able to quit my job and work on this app and real estate full time by buying a five bedroom house hack situation. So I reduced my living expenses. Then bought a second buy and hold it. And through those, I’m able to focus on this app and my real estate business full time. And I did all that in the last year.

Mitch Stephen: Wow, you’re off to a very quick start, and you seem to be a fast learner. It’s not easy, it is, David? The gurus put it in the book and put it on the webinar and put it out there, but there’s a little more to it, isn’t there?

David: There is. I’ve understood the importance of having systems in place to make it a little easier.

Mitch Stephen: Yeah, and you can’t have enough systems really. We’re constantly, at my office … Just for the record … It took me 22 years to figure out, actually, I’ve been about 22, 23 years in the business, it took me about 15, 16 years to figure out how to automate my business. I mean seriously. And then in the last four years, it’s finally come to fruition. I have not seen the last 300 houses I bought. I have not seen the last 300 buyers that bought my houses. This is all done through acquisition managers at my office, that all they do is look for houses and then two or three salespeople, that all they do is sell my houses. That’s all they do. They sell my houses, not anyone else’s houses. I’m at a point where I can offer that. I have enough houses going at any one time, that I can keep them busy and keep them paid.

Part of what makes all that work is the systems. What I’m fixing to talk to the listeners here about, is this app that you have. I couldn’t wait to get you on the line, because I think you have a very special app. And I think you’ve taken it to a level that no one else has taken this idea to.

Idea’s been around for a short period of time, but you’re probably just like me. I had to invent LiveComm, because there was other apps that were kind of doing what I wanted to do, but they were too expensive and they didn’t do exactly what I wanted them to do. And the little components that they were leaving out were very important to me. And this is kind of your story too, isn’t it, David?

David: It is, very much so.

Mitch Stephen: Yeah, so tell us about this app that you have for us.

David: Of course. So like I ws saying earlier in my introduction, I started out driving around. I remember this one house in particular, looked vacant, run down, nobody lived in it, but it had some good bones. And I drove by, I wrote down that address, and my intent was to look up the owner when I got home and to send communication to that owner about buying their property. Because if it’s vacant, run down, nobody lives in it, well that owner’s probably not making any money off of it. And I need that … You know something may be wrong, and they may want to sell it.

Long story short, I was driving by three weeks later, it totally slipped my mind. I never looked up the owner of this house. And then I saw a construction crew out there. I was like, “Holy cow.” So then I went home and looked it up. Somebody just bought it the last week, and they already had a person out there doing repairs and fixing it up to flip it.

That’s when I had an “ah-ha” moment. And I was like, “Man, I need a system that just does all this legwork for me.” If I have to personally look up the owner and then put together my mail piece and then take it to the post office every time, I’m going to lose out on a ton of deals. Not only from the time, but also from just simple procrastination or just life that comes in the way, and prevents me from completing any one of those steps in the appropriate time frame.

So I made an app that just does all that right when you’re in front of the house, if you can believe that or not.

Mitch Stephen: I know exactly your story, because I lived it too like I said, through LiveComm. You know, it’s going to change your life because I think you have a great product. Tell us exactly what the product does for us. Say we’re out there, we’re driving for dollars. We’ve got your app on our phone. What next?

David: Oh yeah. So you take a picture of the house, and two seconds later the app will tell you who owns that property. It’ll say, “Owned by Mitch Stephen, and here’s Mitch Stephen’s address, and here’s a button you can press to send a piece of mail to Mitch Stephen’s address.” Not the property address, but the owner’s address. And then, the unique part about the mail is it features the picture that you took of their house. You know, so it takes it to a new level. And they might call you back because they can tell you’ve actually been there and you’re not just a robot sending mail across town, you know. It just makes it to another level of personalization for the owner.

Mitch Stephen: Man, that’s incredible. That’s a great twist on it. Just that alone is worth the price, because it’s a personal piece of mail now. It’s not just a generic postcard or a generic yellow letter going out. This is a personal piece of mail. They just took a picture. The person who gets this piece of mail will be saying, “Hey, that’s my house. That’s my house right there. This guy’s serious. He’s been out, he’s looked at it. You know this guy’s, you know.” You’ve got to be … This is amazing, man. I knew a lot about the product, but I didn’t know about this. This is a complete separator. You’ve just separated yourself from the whole herd. This is amazing. Alright so, it gives you the owners address, and then you push a button if you want, and it’ll send a piece of mail to it. How much does it cost to send a piece of mail.

David: Well, it costs $1.25 to send each piece of mail. And I’m working up to-

Mitch Stephen: Absolutely worth it. It is so worth it because like you said, you can get it done right now. It’s over. For $1.25, I got a postcard going to this guy. It’s done. I didn’t plan on seeing this house, I was just going to the grocery store. This house is vacant on my way. It hasn’t been vacant before. I can get it done right fricking now. Push this button. I love that part, because like you said, David, right? Life gets in the way. You forget to write it down. You write it down wrong. You get home, you can’t read your writing. It just doesn’t get done, and it certainly doesn’t get done in that split second. Maybe it gets done that evening. Maybe. Maybe it gets done the next day, or maybe it doesn’t get done for a week. Meanwhile, the house like you said, sold to someone else. So I love that feature too. So for $1.25, I can get it off my plate just by hitting a button on my phone, right?

David: Yes.

Mitch Stephen: Can you tell me exactly, and this is not trumped up. I’m excited about this. I have lots of students I’m fixing to go talk to about this who are trying to … They’re doing their stuff, but it’s kind of slow, but here’s an active role and it’s so rewarding to know that you can get it done while you’re out there in your car, all of it. Alright, tell me some more.

David: Yeah, so not only can you get it done, but it also has a repeat mailing feature on it too, so you can set it to automatically repeat that piece of mail in 21 days or 30 days, and you can adjust that based on your preferences. So not only are you said and done, the postcard’s out, but you don’t have to remember to follow up. Which, I’ve just heard time and time again, people have that story of, “It was the third, fourth piece of mail that sent out before I got a call back.” So this app makes sure that all of that follow up happens for you.

Mitch Stephen: Is it the same exact piece of mail, or is it slightly modified to acknowledge that this is a second mailing or a third mailing.

David: So I actually send the same piece of mail. You have the option to change what your mail says, so it’s totally up to you how you want to set it up.

Mitch Stephen: Oh cool. But so if you just want to hurry up, hurry up, you just send out the same one again, which is not a bad plan. But if you want to customize it say, “Hey, just wondering if your house is still for sale because I mailed you a postcard 21 days ago and you didn’t reply. I’m still here.” You know, you can say it like that.

David: Yes. Absolutely.

Mitch Stephen: Oh wow, very clever. And I understand that you’re going through constant modifications. I mean, if you’re like me with LiveComm, we’re always improving right? Always improving all the time.

David: Yes. So one of the latest features that we just added, actually, was taking it a step further. So if you want to send a piece of direct mail, this app can do that for you quickly and high quality. Let’s say you also wanted to get in touch with the owner via phone number and email. You can also do that too, right within the app. And there’s an enhanced search button that does kind of like a deep search similar to what a skip trace might be, that lets you get the owner’s phone number and email so that you could communicate with them through direct mail, phone, and email, all through the app in the few seconds that you’re in front of the house.

Mitch Stephen: Is that an additional charge, or is that still part of the $1.25?

David: It actually is another $1.25 charge. So you can use your credits for either sending a postcard or doing the skip trace right on your mobile app, or both.

Mitch Stephen: Okay, so is this credit card based, or do people have to put money into an account, and then you whittle down on your balance? Or is it an automatic postcard debit kind of deal? I’m sorry, automated credit card debit. Let’s do a cut here. 5, 4, 3.

So David, is this a kind of account where you have to put money in and then you work down the balance as you do different actions? Or do you post a credit card and then you just get billed for your usage every month or so?

David: Okay, you just input your credit card, and that gives you access to the application for $50 a month. Then any mail that you send or enhanced searches that you do, those will be billed to your card at the end of that day, so just based on what you use.

Mitch Stephen: Okay, so. Get this straight, listeners. This is a fantastic price, I think. Everything costs a little bit of money. Finding houses costs a little bit of money. You have to have a little bit of a budget. But if this doesn’t help you get back a deal and make your money back in spades and tens of thousands of dollars more, I mean, I don’t know, you’re not out there working it hard enough.

Here’s the deal. You pay $50 a month automatically billed to your credit card. And then every time you send a postcard, it’s $1.25, or if you do one of those enhanced look ups it’s $1.25. And they add it to your credit card bill. Then at the end of every month, you settle up with them, right? So it’s really not a lot for the customer to worry about. They just need to pay their bill at the end of every month like everything else.

It should be a pleasure to do that, because I don’t see how you can drive for dollars … And let me tell you my personal experience. I pay people to drive for dollars. They take a picture of the house. They text me the picture with the address underneath of it. And then I gotta send it over … They text it to me and they text it to a VA. And then the VA has to do this look up, and then they have to send it over to the postcard company. And then the postcard company has to get it in queue to send out a postcard. And all this takes about seven days if it even gets done in seven days.

And I’m not saving that much money. I’m probably not saving any money by the time I have these things going on. Because I’m paying my driver, the guy who’s out driving for dollars taking the pictures. I’m paying him a dollar a house. And he can hit about 90 to 110 houses in a day. And so I’m not saving any money by doing it my way, and it’s a pain in the butt. It takes three people to be involved in this, or three entities. Four counting me, the guy that’s gotta write all the checks.

You’ve just saved me a huge amount of problems, you know what I mean? My driving for dollars guy doesn’t appreciate you worth a damn because he’s out of a job now, but that’s okay with me, he can find another job.

David: Well, actually, I thought you’d like this team feature, Mitch, that actually allows you to add your driver to your deal machine account. And that way, he can add deals, and they go straight to your deal machine account, and then the mail gets sent out automatically. And so when you get the deal on the house, if you wanted to pay your driver based on the deals that you got, rather than on how many houses he found, right in the app you can trace it back to this deal came from this driver. So that you can pay-

Mitch Stephen: How many phones can I put that on, because I have a tremendous idea and I’m going to tell you what it is in just a second. How many deals can I … Can I just put one person on there?

David: Unlimited. You can have unlimited team members for a driver.

Mitch Stephen: Because this is what I’m going to do. I would go talk to every postal worker in the planet and tell them, “Put this app on your phone. When you see a vacant house, take this picture. My system will know it’s you, and I will get you paid if I buy a house.” That’s gotta be a money maker.

David: Oh yeah. And also it lets them track that you’re actually taking action on the houses they send you. So it keeps their motivation up, you know, even if they don’t get a deal in the first month, because you know it takes time. You still want them to look for houses. But they can open up that deal machine app and see, “Oh, piece of mail went out to this house. I can see Mitch is following up on the deals I’m sending him.”

Mitch Stephen: This is tremendous, David. What else can this thing do? Will it like wash my car?

David: So I thought it was interesting that you said your drivers may find a hundred houses in one day. And I actually am really proud of my personal record. I found 73 in an hour with this app, and I was walking, not driving. I was walking through a neighborhood where I wanted to buy a house, and there’s a lot of rehabing going on. But I got 73 houses captured in my app, and the mail was actually totally sent and repeat mail was set up all within that hour. So I just was able to knock that many houses out in that short amount of time. Where before, you know, it was taking me an hour just to look up the owners of 20 houses or so. So I’m just really proud of the way the app has helped me totally change and turbo charge my driving for dollars.

Mitch Stephen: Alright man, it’s already robust and everything that I … I would be happy with this product just the way it is. I understand there’s maybe a few other features? One of them is the ability to analyze data? Tell me about that.

David: Yeah. Whenever I’m looking at a vacant house, I want to decide if it’s worth sending a postcard to this owner, so I look up the deal machine app. I look up and see when was the house last sold. And if it sold within the last year, I probably won’t send a postcard. But if it’s bought 2, 3, 4, plus years ago, I’ll definitely send a postcard. If I look on their mortgage and see how much they owe on their mortgage as well. So if they’ve got a lot of equity and it’s really run down, that’s an indicator that I want to maybe want to increase my resend frequency, so that I’m really communicating with them quickly so that they don’t forget about me. Because that could be a really great opportunity for me to help them. If they’ve got high equity and the house is really run down and they’ve owned it for a while. Does that make sense?

Mitch Stephen: Absolutely. Absolutely. So look, you’ve got a free give away for us. You’re going to give away unlimited look ups and you’re gonna give $6 worth of postcards. You’ll be able to send out about four postcards for free and experience how this works. So I want you to go to reinvestorsummit.com/machine M-A-C-H-I-N-E. All lower case. That’s reinvestorsummit.com/machine.

And I want you to go try this out because it’s amazing, you can bet I’m gonna be talking to my students about this right now when I get off of here. I’ve even got some key people I want to call that are struggling a little bit, and we’re gonna jump start their house finding efforts right now with this. I’m also gonna talk to them about going and getting some key people set up to go around and drive for dollars for them and get paid upon success.

So my ideas, I’m gonna talk to my students and tell them to talk to the post master or get down in the part of town where they want to buy houses and find the post master down there. The delivery person, the actual delivery person in the truck down there, and get a couple of them on your team. I think that’s incredible that other users can do look ups for you. I think it’s incredible that you can let those other users know that you are following up. I just don’t see how this makes money, Dave. How long has this product been out on the market?

David: I originally made the product for myself, but I didn’t make it public and a polished app until about June 2017. So it’s been about five, six months so far. And we’ve already had some people say, “Well look, I got 100, 200 houses in the deal machine app. And I already got one, two, or three deals that kind of pay for this app for the next two or three years.

Mitch Stephen: Wow. Again, you guys, go to reinvestorsummit.com/machine and get your free trial offer here with all the free unlimited look ups, and get yourself four free postcards sent out just to see how easy it is. You know, you just push that button and it’s all done. See how it works for you. This is a tremendous product.

Man, do you have any advice, David, for any of the new startup real estate investors out there that are just getting started, maybe they’re struggling? Do you have any advice for them?

David: Yes. A lot of times, it’s really easy to say you want to drive for dollars, and kind of willy nilly send a few postcards here or there. But I would recommend that you get to 100 postcards as quickly as you can to really test if driving for dollars is going to work for you in your market. I think you’re going to be happier if you can find that out sooner than later. So that if it doesn’t work, you know, you can move on to a different strategy. But I’ve seen this work in a lot of markets, and I think you’ll be really pleased with your response rates when you’re driving using the deal machine app.

Mitch Stephen: Yeah, well I’ll be signing up as soon as we hang up here myself. And I’m not kidding. I want to thank you for taking the time to come on. It’s been enlightening. I’m very excited about this product. I think it’s going to help a lot of people, especially a lot of people starting out that don’t have a large budget, you know? There’s people like me, and I can send out 10,000 postcards and do a lot of things and have VA’s. But I’m also constantly trying to figure out how to cut my overhead. And you’ve just cut my overhead on this, by a lot. I was very serious about-

David: Great. I’m glad to hear it.

Mitch Stephen: I’m very serious about mailing out, and I’m very serious about that portion of that department that helps me find houses. I don’t find 100 houses a year because I’m not involved. I am involved. I’m very involved, and I have very intricate systems. And you just … You know, it’s always nice when you can say, “Hey, I found a way to cut the expense on this.” Because you’re always adding expenses, it seems like, in business. Adding more expense, adding more expense. It’s nice to find a place where you say, “Hey, we cut some expense today.”

I think this is really a viable product. Very, very reasonably priced. $50 a month. $1.25 per postcard. A personal postcard with a picture of the house that you’re taking a picture of on it. The look up, and then $1.25 if you want an enhanced look up if you want to find phone numbers and emails and get a little closer to that owner possibly. Really great product. I want to thank all the listeners out there for taking the time to get you some David Lecko and the deal machine. Let me know your response on this. If you guys use this product, send me some emails and let’s get David some reviews, because I’m sure you’re going to be happy. David, thanks a lot for being on the show.

David: Thank you so much for having me. It was my pleasure.

Mitch Stephen: Alright, this is Mitch Stephen with the Real Estate Investor Summit. Hope you have a great week, hope you have a great month, hope you achieve your goals this year in spades. And I guess we’re done for today. We’re out of here. Bye now.

Speaker 1: You’ve been listening to the owner financing master, Mitch “Be the Bank” Stephen, on the Real Estate Investor Summit Podcast. Let us now blatantly, without apology bribe you towards financial freedom by offering you a whole bunch of free stuff. Go to reinvestorsummit.com and get you some. And ya’ll come back now, ya hear?

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