Episode 288: More Than Just Driving For Dollars with Nate Pummel
One of the key elements in finding houses is driving for dollars – a term real estate investors use for a technique for finding great deals on houses where you drive slowly through a neighborhood looking for distressed properties. Single-family investor Nate Pummel created a cutting-edge app that rivals driving for dollars and has added abilities at a lower cost – the DriveBuy REI. He joins us to describe its applications and why he created it.
Watch the episode here:
I have Nate Pummel with me and he’s going to talk about how to make Driving For Dollars one of your key elements in finding houses and how he’s taking this thing to the nth degree to make it so much more than what Driving For Dollars used to mean to you. How are you doing, Nate?
I’m doing well. Thanks for having me on.
Give us a little background so we can figure out who Nate Pummel is and how you got on this show and then we’ll jump into your product and how you’re helping investors.
Like most people that end up getting into real estate, I was working a job and found out that I was going to get a promotion and it was going to be a very quick promotion. The promotion ends up being at 0.4%, after eleven months. I was sitting there thinking to myself, “Am I busting my butt for 0.4%?” I thought, “This is crazy.”
Usually what they do on those promotions is they give you three times the responsibility and then they gave you a 0.4% raise.
I was sitting there thinking, “This probably isn’t the best route to go. I’m working extra and my kids are asking me where I’m at. I need to go look into this.” That’s when I started digging deep into like, “Can I make this real estate investing thing work?” I live in Denver, which was a super expensive market. As I was doing research and getting into the game, I listened to a podcast. I took the plunge. I bought a property. As I listened to more podcasts, I found that most people were talking that they were driving for dollars with pen and paper. I thought, “This is crazy.”
We live in the digital age and yet these extremely successful investors drive around with a pad and paper and taking pictures, sending addresses to their VA and looking them up. I was like, “This is all accessible to us.” I ended up making a demo in PowerPoint and I partnered with a flipper here in Denver on my grandma’s house when she moved into a nursing home. I took that money and we built our first version of a software product to try to help. It’s been an overall good experience. I’m starting to live and breathe all this real estate investing stuff, from buying to creating products and all kinds of stuff.
If anybody’s tried to come up with a software or a program or an app, it’s not an easy task. My hat’s off to you for even wanting to tackle it. If you’re like me, I would have never tackled like Livecomm.com if I’d have known what a pain in the ass it was going to be. You didn’t do it so deep that it becomes a challenge like, “I’m going to get this thing done if it kills me and I’ve come too far to quit, so I can’t quit now.” You’ve got to keep going. Which one was your revelation?
I reached a certain point and I thought, “This is the do or die time.” I either need to move forward and do this thing for real or I need to shut it down. When I decided to do things for real, I sold all of my investment properties to create cash to build the next version. It’s been two steps forward, two steps backward thing. I’m excited when it’s only one step back and two steps forward.
You’re out there, you’re seeing these people doing the business like the Flintstones, and you come up with this idea. Tell us about the product. The name of the product is Drive Buy REI. Before you run and go directly over there, just know there are some discounts here because I’m always trying to work out some advantage for our audience here. Nate was kind enough to offer some incentives for people that come through this channel. I appreciate very much that you did that. Let’s learn about the products. It’s called Drive Buy REI. We also have a giveaway too. Let’s learn what you’re giving away first. Tell us about the product.
Drive Buy REI is essentially the best way to automate the Driving For Dollars experience. Instead of that pen and paper and busting up that map and a highlighter, we put a tool on your mobile phone. You can track where you’ve been, flag the property really quick and essentially all those leads get saved and put into a database on the web. You hear people talking about all this cloud platform technology, all our stuff is in the cloud. It’s shared across all your devices and you can manage and market all the leads that you find through our web portal. You can send direct mail and we’ve got skiptracing.
The cool thing that we’ve decided to do in Drive Buy REI is not only have we automated the driving for dollars experience, but the other piece we did is we’re trying to be a full-service platform. You can download any lists from any service and upload it into our platform and use all of our marketing tools without a subscription. If you download a source list and some probate leads, you upload them into our list, you can skiptrace them, send direct mail and all kinds of cool stuff. You can manage that all within our mini CRM right on the web.
Let’s take it from the very beginning. I’m in my car. I decided I want to go find some houses to make offers on so I’m going to go start my Driving For Dollars, take it from there.
You would open up the mobile app, you’d kick off the application and you start driving. We have two modes. We’ve got a tracking mode and a follow mode. The tracking mode, we leave a highlighter behind all the streets that you’ve driven on, and when you find a property that’s in distress, you would press on that property, drop a pin on it and keep going. Whatever meets your criteria or you’re in your farm area, you can see right on the map every street you’ve driven down. You can see all the pins of all the houses that you’ve dropped. Once you drop a pin, if you have a subscription with us, you automatically get the owner’s name and mailing address.Follow up is key. That's where you separate yourself. Click To Tweet
You’re going to the tax records and pull up the taxpayer records information.
We also give some light financial information, when it was purchased, what they bought it for, an estimated mortgage balance and stuff like that.
The estimated mortgage balance is very important. It’s an estimate, so you never know.
The date of purchase and the estimated mortgage balances are all good ways to triangulate and see, “Is this somebody I need to pursue or not?”
My experience driving for dollars is I used to pay people to do that. My town is San Antonio, Texas and it’s about 1.7 million people. In a day, you could get about 100 houses, but maybe you can get more of the way you’re doing it because my guys were doing it the Stone Age way. They’re taking a picture and writing all the stuff down and sending a text to every house. We have to do all this work with about 100 houses a day. I’d pay $100 a day for an eight-hour day and then I’d pay them $20, $30, $40 for gas or whatever. It’s more of an incentive bonus if they could get me some decent houses. This will be so much easier. If I have an account, can I assign that guy to the account? Am I the only one that can have it on my phone or what?
We’re releasing our bird dog capability. You’ll be able to hire drivers and assign them to your account. You’ll be able to see where they have driven and it’s time-stamped so you know how long they’d been out. It will be an effective way to start managing the driving for dollars process because tons of people, especially as either the market shrinks or expands, falling back on driving for dollars is pretty common with most investors. Knowing that your drivers are actually driving and what streets they’ve gone down, you can see like, “Are they just flagging every property? Are they following the process? Are they going down the streets that I asked them to go down?” You can see if they miss anything and stuff like that. That’s one of the things we’re working hard on most right now is getting that bird dog capability out because a lot of people are asking for that.
That’s cool because you can see what you’ve covered. The next guy that goes out doesn’t go to this neighborhood. Every street in that deal is highlighted already. Don’t go to that. I find it cool about the mini CRM. I’d like to hear more of that because finding these houses and doing the one step, that’s the very beginning of being a real estate investor. It’s all in the follow-up. The follow-up is what separates the men from the boys. Whoever has the best follow-up system is going to buy more houses and we all know that it’s been said a thousand times. It’s probably no news, but in case you haven’t heard, you start buying houses a lot of times in the sixth, seventh, eighth, ninth, tenth touch. A touch is any form of communication, a postcard, texts, voice drop, a letter or a personal phone call. That’s a touch. If you’re dropping off before multiple touches, you’ve done all the upfront work and then you’re fallen dead there too soon. Do you agree?
That’s exactly right. That follow-up is important in all of these and in every industry. I think it’s lost, and people get busy and some people aren’t serious yet. One thing that I’ve experienced only with the app within a real estate is not to be shy with the follow-up. I’ve followed up with some people 50 times. I make a reminder and I follow-up with them once a week, either via email or text or something. I follow-up until they say, “Stop following up with me.” If they don’t say stop, I keep going. The follow-up is key and that’s where you do separate yourself.
Let’s talk about that follow-up. You can say as a private individual real estate investor, “I’m going to do this,” or you’re not. You might do it for a week. You might do it for two weeks. If you’re good, you’ll do it for a month maybe, but Christmas is going to come. They’re going to break out the egg nog, you’re going to take two weeks off and then you’re probably not coming back. It’s like the first of the year pledge to lose some weight. It lasts about two weeks and then you’re like, “Maybe.” You either have to hire someone to make sure that gets done. Usually, the most efficient way economically is to get someone overseas to do this stuff for $2, $3 or $4 an hour, so you can afford to have someone on it every minute, every day for months and months on end. It’s very important to them because that’s their livelihood. That is their job. If they don’t do it, they don’t feed their family this month. That’s one way. The other way is just to automate.
Most of the time it’s a combination of both because I found that very few automations are complete to the nth degree. I wish it weren’t so and I hope that you invent that one, but usually there is still something to do or to oversee. Even if it’s automated, someone needs to check to see that the automation hasn’t got a snafu in it or something. We’re dealing in technology and as good as any of us want to be, I with Livecomm or you with Drive Buy REI or anybody, links break and people got to get notified. You got to fix some stuff sometimes. It’s part of the nature of the beast now. Future things will get better, but now someone’s got to be watching the systems on a daily or at least every other three or four days. If you don’t stay on top of it, you’ll look up one day and think, “This thing’s been frozen for a week and I haven’t done anything.” You said mini CRM, so I’m going to guess that there’s going to be some room for some real people in there. There are things that automation can’t do. Automation can’t make a personal phone call. Automation can send a text to the person you want to call or you and say, “It’s time to call this guy at 123 Main Street at 21066940 or whatever.”
It can do that but you can’t automate a personal phone call just by the virtue it’s a personal phone call. Someone’s got to do it. I’m sure you could automate it if you were out there. Mailing a hard copy of a contract, that’s hard to get a robot to do that. It can be done but in our office, we haven’t gotten that far on automation. Someone gets a text saying, “You’ve got to copy the contract and send out a hard copy.” That means they’ve got to drop it in an envelope, put a stamp on it and mail it. We also do email right behind it asking them if they got the hard copy in the mail. “By the way, here’s the digital copy,” because it’s an excuse for another touch.
I think driving for dollars is one of the most effective ways to find houses. What I’ve learned is you make your money in the field. You buy houses in the field. You can try to sit at a desk all you want to, but it helps when a live body’s out there, especially if you get out and you want to talk to the neighbors, two to the right and two to the left and four across the street. What happens is, you may not even buy the house that you’re asking them about. They’ll tell you about grandma’s house three blocks down the way. That’s the one you end up buying. It’s like activity spawns activity. I love driving for dollars for that reason. I get to go out and I get to see what’s going on in those neighborhoods. I get to see right around the corner, they’re in the process of refurbishing five houses. The comps are going to go up in this neighborhood in a short period of time. By the time these houses are finished, all the comps are going to go up. That’s a key indicator. I can pay a little bit more for that house than maybe I would have three weeks ago when I did know this.
That’s what’s cool about Drive Buy is now we’ve made it fun. The old process is a drag and most new people want it to be so easy. They don’t want to do much to get started. It makes it fun. You can focus more on those more high-value activities like talking to the neighbors. As you’re driving, you start to get in the groove and you start flagging stuff. You see how easy it is to start capturing and building super high-quality leads lists. Back to your other point, we don’t want to automate everything. You want to be engaged in your business. You want to be able to manage that business. Our mini CRM has an audit trail that says what you’ve done and when. You can check those leads, “You sent a piece of direct mail.” If you want to send out another campaign, you just click repeat, send it and you’re good. That mini CRM, we definitely have room to add some features, but it’s staying in the business and making sure you’ve got a handle on it. It’s probably better to nurture 200 leads than it is to go capture 1,000 leads and do nothing.
Talking about adding features and stuff, when you’re in the digital application world or you’re doing apps or you’re trying to do software like this, do you call this an app or software?You don't want to automate everything. You want to be engaged in your business. Click To Tweet
We are a software application that has a mobile tool. We’re a platform. It sounds hip. Our domain has an IO at the end of it, so that makes us even hipper. That means we’re officially a platform.
Let’s talk about pricing. I want to tell everybody that prices are subject to change. Nate has the right to change his prices or add value or subtract or whenever he wants to do. Where do we stand on price now? What does this run a person?
We developed this to help the newbie. We started looking at all the other software competitors out there that offer similar features. They’re anywhere from $50 to $150 to get started a month. We took a look at that and said, “We want this for everybody.” We have subscription starting as low as $10 a month all the way up to $40 a month. We even have users that have a customized plan that are doing 6,000 leads a month. They obviously get customized pricing for that. You can do as little as 50 leads a month, then you can go up as high as 10,000 leads a month if you want. We have those basic pricing model but we love to customize as well.
Go to REInvestorSummit.com/DriveBuy. You’re offering a free trial. Tell us about that.
Everybody that comes out and it’s important for people to have a chance to try it out. We have a free trial. You can go drive around, you get ten free leads, go make sure the data in your area is quality. Once you’re ready to roll, just jump into a subscription.
They will be able to get this free trial offer over there at REInvestorSummit.com/DriveBuy. Also, there are some incentives there discount-wise. Get your free trial offer. When you’re starting a program like this, we’re always looking for case studies and people that had success. Are there any case studies of users that jump out in your mind, some success stories?
I’ve got a couple of people. I tried to get him to give me a video testimonial. He is within a couple of hundred leads. He was able to close on a deal. I think he made $24,000 on that. It is a numbers game. A lot of people ask, “What’s my response rate going to be if I send direct mail? How many deals am I going to get?” That’s different for every market. The most important thing is people that have been consistent with it and have created because these lists are the most valuable list that you can get. If you’re driving your area and you’re consistent, you’re going to have success with it. You need to make sure your volumes are up. We’ve got several people that have been loving the app with pretty good response rates for direct mails based on users that have done metric tracking and understand the response rates. We try to dial in most of our product to make sure that you get the most value.
Let’s talk about the numbers thing. I want to concur with you. It is a numbers game. I talked to people that are only mailing 200 or 300 letters a week or a month. I say, “Hopefully, you get lucky, you get inspired and you buy one soon.” Don’t be surprised if you go six months before you buy one because you’ve got to do hundreds and hundreds of people to give yourself a chance. Also, don’t forget that it’s accumulative. If you’re doing let’s say 2,000 letters a month, the first month there are 2,000 letters out there, but the second month there are 4,000, and by the third month there are 6,000. You go a whole year, now you’ve got 24,000 letters out there or postcards.
Don’t be surprised that the person you buy the house from is someone that you sent out on the first batch. The oldest lead that we’ve ever purchased was a couple of years ago from a mailing we did. A couple of years that they were waiting for the circumstance to happen. He pulls out this letter and I have my letters coded. I know where they went out and I’m going to go, “Wow.” I don’t even know if we were tracking this stuff back then. We went back and that letter had gone out a couple of years ago. I asked him, “How in the world do you still have this letter after four years?” He says, “It interested me when I got it, but it wasn’t time yet. My grandmother was getting up in age. We can already see that her health was failing. We knew that she has some houses that we were going to have to liquidate the estate.” She had done very well at planning her estate. Not to be morbid or anything but he said, “I know that one day the day will come for all of us. I just had it in the file with the estate stuff so that when the time was there, I figured if you guys were still in business that you were someone who was doing something right.” That’s why he called.
Don’t forget the cumulative effect of what you’re doing. I’m following up on 16,000 warm leads. People that I have talked to or have called me or made a response or texted me back or something. There are leads that you put in the CRM, potential houses I want to buy. The minute there is one contact made, they move into a whole another bucket because that’s a whole different level of a lead now. They have made contact or we’ve spoken. Please don’t forget the cumulative effect. If you’re just starting out in this business, it’s tough. The first year, no one knows you. You have no articles out there. You have nothing. You’re starting from zero. It takes a year, a year and a half or two years to start to get to a point where every now and then some seller will walk in the door out of the blue. That doesn’t happen in the first six months. No one’s walking through your door out of the blue because you have not been around long enough to have any momentum.
Jump-starting your momentum means you throw out massive numbers. If you’re in any major city, you can use Drive Buy REI and jump your number’s up as fast as you can. Try to see 1,000 houses this month and get them through the Drive Buy REI. Get yourself jump-started. You’ve got to take massive action. I didn’t coin that phrase. That phrase has been around for a long time. Even 1,000 might be dumb, maybe you should get 5,000 if you want to get going. You or somebody driving their butt off for a couple of months. Get something going and get it fast. The difference between life and death and a lot of these newbies coming on is they got to see some success pretty soon or they run out of gas. They run out of financial gas and they run out of hope. The best way to hedge against running out of that stuff is to put up huge numbers as much as you possibly can. Hit up a strike or two so you’ve got some refueling going on there.
What I’ve been telling a lot of newbies too is this tool now enables you to start working with other investors that are more experienced. If you download the $10, $20 subscription plan, you can start building up a leads list. You can start going to your local meetup, start talking to some other high-level investors and say, “I’m investing tons of my time and money into building a quality leads list. If I capture this lead, will you work with me or can I sell it to you?” If you don’t have the experience yourself yet, it’s still a super easy way to get involved because the value of the lead is so high. That’s one thing that we’ve been trying to get our newer users on is use the app. You can show people that you’re serious and start talking to the experienced investors at your meetups and say, “These are the leads I built. If you want, I can drive for you. Let’s work together.” It’s a super low-cost way to get in there.
That’s a good point. Let me tell you a story about my partner, Mike Powell. He was in San Antonio and he wanted to hire me for one-on-one coaching. I told him, “I don’t coach in San Antonio for a lot of different reasons.” It’s not necessarily that I have the scarcity mentality. That’s not 100% of it, but even so, there are some ponds that I fish in that are very shallow. If someone pays me, I want to tell them everything I know because they deserve to know everything I know. I want to do a full download dump to them. If you’re in my town, there are some things I’m not going to tell you because if you put that on a billboard, maybe you get ten fish out of that pond. If everybody’s fishing in that pond, you’d be lucky if you get one fish out of that pond.
Some of these ponds are shallow so I told Mike Powell, no and I told him no again and I told him no again. He ended up being my partner. This is the key to how he ended up being my partner. He kept finding tremendous deals and signing them up on a contract where he had 30 days to buy and he just kept bringing me deals after deals. I didn’t want a partner. I wasn’t looking for a partner. I kept blowing him off. I certainly didn’t want to train them. Without any training, he was getting out there and getting into stuff. The moral of the story is the ability to sign up great deals will get you in rooms and in places that you wouldn’t otherwise be. If you walk in there going, “Can I be your partner?” “No.” “Why?”If you're driving your area and you're consistent, you're going to have success with it. Click To Tweet
When you start saying, “I’ve got these five deals. I’ve got these three deals. I’ve got this one killer deal. Will you partner with me on this one deal?” That’s how it happens. The deal runs everything. The deal will find the money, the deal will find your partner if there’s one out there for you and you’re a good partner. If you’re looking for a partner, it will find you a partner. This business has an incredible way of skyrocketing people that have integrity, work ethic, patience and have some vision.
Also, it’s the education piece. As soon as you lock up that deal, your education is kicked into high gear.
If you’re going to partner with someone, I won’t partner with someone just because they had the money. I would be looking for the guy who has the money and has all this experience behind him in this industry. You’re not only getting the money or the funding partner, but you’re also getting a partner that can educate you, guide you and make you better. In my beginning days, I would partner with people and all they had was the money. I thought, “This sucks because I’m not learning anything.”
I’m out here, sometimes not even sure of myself. If I were to partner with someone that did 200 houses already, they’re not going to let me mess up and I’m going to learn why they’re telling me things. I’m also going to get privy to their network at some point. Be careful with that. You don’t want to steal a guy’s network. If your partner is borrowing money from a certain man, you certainly don’t go to that man and ask if you can borrow money. That would be a complete out-of-bounds move. He uses a plumber three times on a job and he did a good job. You can say, “I don’t have to worry about where the plumber is anymore. We’ve got a plumber over here now.”
That’s what I’m finding now is I’ve been getting into more deals as I’ve built some good connections and I typically go through that person to ask for. I did my first deal with private money and I found my private money person. I asked a friend that I had built up through investing and said, “Is it cool if I have this deal? I need some private money. If you feel comfortable sending it to your network, it’d be awesome.” She did, based on the report that we’d already built.
You did the right thing. You went and asked, you said, “I know who they are, but I’m not going to go to your people without asking permission.” That’s a nice way to get exed out of everything just by trying to be conniving. You noticed I named integrity first, that was the first one. You’ve got to prove to the community out there that you’re a guy that was worth doing business with and that you’re not a threat. Don’t be a taker too. You’ve got to find something to give back. I don’t like it when people say, “I’ll take it to lunch and let me rake your brain.” I say, “That sucks.”
People probably get sick of me saying this. I went to La Calle U. La Calle means a street in Spanish. I didn’t go to college. I went to La Calle U. I learned from the street. It’s probably the most expensive college on the planet. I can think of $800,000 it’s cost me so far just right off the top of my head. No one’s sending me a little piece of paper in a frame. I don’t need that certificate anymore because I’ve got a bank statement. I graduated about $5 million ago, at least. It’s an interesting conversation. I think we’ve covered it pretty much, but let me reiterate, you’ve got a free trial offer. Go to REInvestorSummit.com/DriveBuy and you can sign up for the free trial there. By the way, it’s evergreen. You could put as much stuff over there if you want to. Anything you want to say out there to the new investors?
Try to take action every day and keep moving forward. If you can keep moving forward, you can make it happen.
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You can’t steal houses in slow motion. When it’s time to write, all you’ve got to do is lose one deal that you’re trying to buy through your 401(k) or your IRA because you’re waiting around for a custodian. You lose a deal that could have made you $20,000, $30,000 or more. That will be the last time you’ll ever stay with an account that doesn’t have checkbook control. I suggest that you go to TaxFreeFuture.com. We have 37 videos over there that tell you how, when, why and show you case studies of how people are taking little bits of money that they start their retirement with and how they grow that little bitty, tiny amount of money. When I say tiny, it’s $250 or $500 and how they’re growing it into hundreds of thousands if not millions of dollars in very few moves. It’s very interesting. The case studies will blow your mind. Go to the website and for sure you will be surprised at what your financial advisors are not telling you. I’d like to thank you for stopping by to get you some Nate Pummel and learn about Drive Buy REI and how to make Driving For Dollars more effective and more fun. I hope you’re achieving all your goals.
- Nate Pummel
About Nate Pummel
I’m married and have 4 young daughters. I’ve always wanted to be an entrepreneur and I’ve always loved real estate. I dabbled in real estate education and dabbled with some other business ideas but never really got too serious until I had my third daughter. My two older daughters were struggling with my work schedule which started to make me think harder about earning income a different way so I could spend more time with them and my wife. It all really changed for me at work during a “big” promotion. I was a high performer and got promoted after only 11 months in my current position for a whopping 0.4 percent raise. That basically led me to the realization that if I ever wanted to live the life I wanted for me and my family I was going to have to do something different. That led me back to real estate where I’ve been investing for 2.5 years and led to the creation of my real estate investor startup, DriveBuy REI. Needing capital for my startup caused me to sell my current rental portfolio and during that process I found RoofStock.com. Now I focus on building teams out of state that can help me flip tenanted properties on RoofStock.