Gary was forced into real estate at a young age, his family had a business and he got his real estate license while in college. He decided to quit real estate at that time and go full time with technology. Years later, Gary wanted back in the real estate field, and built up to where he is today with REIvault. Hear how his business helps many investors find deals and how he scaled his business. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
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Joe Fairless: Best Ever listeners, how are you doing? Welcome to the best real estate investing advice ever show. I’m Joe Fairless, and this is the world’s longest-running daily real estate investing podcast. We only talk about the best advice ever, we don’t get into any of that fluffy stuff.
With us today, Gary Boomershine. How are you doing, Gary?
Gary Boomershine: I am doing great, Joe. Pleasure, I know we’ve been working for a while to get this set up, and I’m super-excited to be on here with your listeners and add a ton of value.
Joe Fairless: Yeah, looking forward to it as well. A little bit about Gary – he is a Fortune 500 consultant and founder of REIvault. He founded REIvault when he realized the only way he could scale his business was to implement rock-solid systems and procedures.
He’s been investing in real estate since 2004. He has bought and sold more than 300 properties since then. He is based in San Francisco, California. With that being said, do you wanna give the Best Ever listeners a little bit more about your background and your current focus?
Gary Boomershine: Yeah, I’m super-excited to do that. So I grew up in a real estate family; in fact, all of us were sort of forced into real estate. I had a license — I’m 49 years old now; I was forced literally two weeks after turning 18, I had a California license real estate certificate. I was commuting back and forth from college, holding open houses, and we were buying rental properties.
I absolutely hated it. I hated being an agent at that particular time, more because — if you’ve ever been in a family business, it was like we were all forced into it… So I ended up going to UC Davis, I got a computer engineering degree, and I went down the technology path.
It was awesome; I worked hundred-hour weeks and traveled, never saw the light of day, and it was actually 2004 my wife and I, with two small kids, took the massive plunge. I actually look back – I know a lot of your listeners probably know this, but… We had two incomes, we left the dual income, a big mortgage (we had a mortgage on our house), literally went solo full-time in real estate, and… Yeah, 2004, I never looked back.
We closed our first house in Bakersfield, California, in 2004. We made 181K, and that really set us off.
Today, I bought and sold, as you mentioned, hundreds of houses. I do a lot of wholesaling today, I do a lot of lending, a lot of private lending, I lend to other real estate investors, and one of the things I found, Joe – my background was really on technology, and in this market, a couple years ago it was different. It was really easy to find deals in 2009-2010. It was bank-owned REOs, foreclosure auctions and HUD properties.
Today it’s all off-market, which means you’ve gotta go direct to the seller. I came up with a way to do that, and I got together with other smart investors, a bunch of my friends, and we said “Hey, instead of us all having to figure out direct mail and build our own phone team and talking to sellers and scheduling appointments, what if we had one shared team?”
So a couple years ago I built a company called REIvault, we’ve done over 25 million pieces of direct mail, we’ve got about 250 investors and real estate agents around the country using our shared service, called REIvault. It’s pretty cool, it keeps us busy, and a lot of fun.
Joe Fairless: So you send out the direct mail on behalf of your client to pay for that mail to be sent? I imagine there’s more involvement in that.
Gary Boomershine: Yeah, if it’s agents that are typically also looking for buying properties – maybe they’re flipping properties, either wholesaling, fix and flip, maybe they’re buying rental properties… If they’re going direct to the seller, the ways to do that would be either work with other wholesalers who are finding the deals, or we’re doing direct mail and/or Facebook ads, pay-per-click, bandit signs etc.
So I said, “Hey, instead of everybody having to figure that out, aren’t we real estate investors? Why don’t we have one team of experts that manage it for us, instead of having to hire a bunch of people?” I have a staff of over 50 people, and people plug in as a member of our service, and it’s like tapping into a staff of over 50 people for the cost of one.
So we charge the equivalent of one VA, plus whatever their marketing budget is, and we’ll do all the direct mail. Actually, we’ve got a husband and wife – they’re doing $18,000/month in marketing, and then we’ve got other people that are doing $1,500, $2,000/month. So it’s “Hey, what’s your market? What’s the zip codes of the market, and what type of product are you looking for, and then what your budget is?” Then our team will actually give the best practice and then manage the whole thing.
So what we’re really good at is making the marketing happen, and doing the marketing. Number two, all the follow-up systems, because that’s key in this market – as leads come in, being able to automatically follow-up via text and voice broadcast.
And then lastly, I’ve got a trained, expert phone team. So as the leads come in, we actually even offer the phone team that is working actually forever to talk to the sellers, pre-screen them, qualify them, and schedule the appointment. So as a real estate investor, we just wanna get in front of sellers that are ready to go, right? I’ve got a team that makes that happen.
Joe Fairless: And at what point is the lead turned over to a customer of yours?
Gary Boomershine: From the very beginning. They see exactly what’s happening, because we provide a system, so they’ll see everything that happens, but ultimately, a lot of our members really just want the appointment. It’s like, “Put me in front of somebody”, and they’ve been screened… I know that they’ve got a 3-bedroom, 2-bath house, it’s in this condition, this is the price they’re looking for… We call them sales ninjas, because a lot of people in this market — you know this, Joe; you do this every single day, right? At the end of the day you’ve gotta have somebody on the phone that’s really good. A lot of people, they’ll get their marketing working, but then they’ll hire a Phillipino VA for $4/hour, and then wonder why they’re not making any money. It’s really important to have an expert. They’re called “Inside sales agents.”
We have a full staff of people that are managed on performance, and really good on the phone. They’re scripted, they sound awesome, and we all tap into them at the cost of a fraction of what it would cost to hire somebody ourselves, because we’re able to share this group.
Joe Fairless: If they’re scripted but they’re managed on performance, that takes away the human element, for better or worse… Or am I missing something?
Gary Boomershine: Well, as leads come in, it’s the right words at the right time. So we provide the right words at the right time; there’s still the human element. We’re training these people to be really good — so it’s the three things: you’ve gotta be sharp as a tech, knowledgeable as all heck, and really, really friendly. That’s how we hire and train… But then they are on a script, so as a seller comes in – let’s say a seller calls off a postcard; about half of the calls (40%-50%) that come off of the marketing are hang-ups. The sellers get nervous, they don’t know who you are, so ideally, you wanna get back to those sellers within 15 minutes. By the way, this is a huge nugget, because there’s a ton of money off of these hang-ups.
So our team knows the exact words, which is “Hey, we just missed a call from you. Were you calling about a property that you were thinking of selling, or a note that you received in the mail?” to start the dialogue.
Joe Fairless: Because the answer is yes, so it gets them saying yes.
Gary Boomershine: Yeah, the answer is yes. So we take them through the process, we say “Hey, do you have a couple of minutes? I could ask you a few questions, and then I’ll pass this over to a buying specialist who will be able to make an offer and provide more information to you.” So the right words, but again, it doesn’t sound like it’s scripted… But you know, in sales it should be scripted, even as you’re building a relationship.
So with 250 members, we’ve got a lot of seven-figure real estate investors, so we’ve come together and said “Hey, what are the right words?” and collaborated on that, and then I just built the team… So it’s taken all the mystery out of it.
Joe Fairless: It surprises me, 40%-50% are hang-ups. I didn’t realize that. So they’re seeing a piece of marketing or they’re receiving a text, or something, and then they call, but then once they hear a human being on the other end of the phone, then they just hang up?
Gary Boomershine: Yeah, believe it or not… And it depends on the type of marketing. So it depends whether it’s a letter, whether it’s a postcard, a package etc. It’ll range anywhere from about 20% to 50%.
Joe Fairless: What’s 20% versus 50%? What piece of marketing?
Gary Boomershine: If you’re sending a message specifically about buying the house, so it’s like “Dear Mark, I’m interested in purchasing your property. Here’s a picture of it” etc., you’re gonna find fewer disconnects. If you’re sending more of a blind copy, which is probably the best-performing piece… Blind copy means we’re not sending a message directly about buying the house. It’s a Dan Kennedy kind of approach, it’s a two-step marketing piece… That’s gonna get a higher percentage of hang-ups.
Joe Fairless: What would be a blind copy message?
Gary Boomershine: Blind copy – some of your people have probably seen if they are talking to sellers there’s a postcard called third notice…
Joe Fairless: Oh god, I hate those things… [laughs]
Gary Boomershine: Yeah… So some of those out there – that will get a much higher response on hang-ups. By the way, that’s the best-producing piece if you’ve got a phone team, believe it or not.
Joe Fairless: I can see that… But you’re tricking people.
Gary Boomershine: Yeah, it is. We don’t send a ton of them out… We used to. That actually was invented from a wholesaler in South Florida.
The one that we like the best is a handwritten, Google Street View-looking letter that goes in a live envelope. It’s super-personable, and that’s been amazing.
Joe Fairless: And the Google Street View of the subject property, right? It’s like you’ve been there, taken the picture… I’ve received those, too. I liked those. If I was ever looking to sell, then perhaps that would be the one I would respond to.
Your personal focus now – what percent is on REIvault versus private lending versus wholesaling?
Gary Boomershine: That’s a great question. I have a COO that runs an integrator that runs most of my REIvault business… So 40%-50% of my personal time doing business is still on REIvault, and then I would say 40%-50% of my time is on real estate, and then on the real estate side I do a ton of lending, but lending is actually super-easy, because I’ve got brokers that are finding deals for me, and I’m usually funding them, so it’s not a ton of work.
In terms of wholesaling, on the real estate purchasing, especially in this particular market, I do about 80% of my deals that are wholesale flips, because I’m in and out of them, and I’m cherry-picking some of them… About 20% of those I’m cherry-picking, and I’m usually picking them up creatively; I’ll turn those into VRBO type of properties, or I do another process where I’m getting long-term financing from the seller, in some cases… So that’s a total of about 20%.
But most of my business on the real estate side, where I’m actually doing houses, is wholesaling, 80%, 20%, and then a ton of lending. In fact, I’m doing about a million dollars worth of loans, literally. Right after we get off this call, I’m looking at the packages to fund two loans.
Joe Fairless: Lending versus wholesaling – you’re spending more active time wholesaling… What percent of your profit comes from lending versus wholesaling in a calendar year?
Gary Boomershine: Well, I’ve got cash now, cash flow and cash later… Most of my time is focused on — what I personally like is mailbox money, because it’s the easiest… Wholesaling – a part of it is… A lot of people — I’m practicing what I preach, and up until a couple years ago I didn’t even know what wholesaling was. I started this business where I was basically buying luxury homes, I was negotiating with banks… Back in 2004 to 2007 I was doing a ton of short sale deals… And by the way, I was the only game in town, and realtors didn’t even know what a short sale was. So I was doing that up and down the peninsula in California… It was all creative.
So wholesaling was more 2013, when I saw the market… There was no deal flow, and if you could control the deal flow, the cash buyers were out there. So anything that needed cash, I unloaded. I don’t like holding properties — I’m in California, so it’s super hard to cash-flow a property… So that’s how I learned wholesaling; it’s super-easy. I have one sales acquisition manager in each market, and a couple of phone sales ninjas that are actually talking to sellers.
There’s not a lot for me to do in that business, and we have a pretty specific way that we’ll interact with the seller, because I’m always making multiple offers to the seller – we’ll make him a cash offer, and if they’re flexible on payment terms, then I usually get involved, and I do about 20% of those types of deals.
Those are the ones, by the way, I love, because those are all cashflow for me, typically. Not a lot of work…
Joe Fairless: With typical lending terms – what are your typical lending terms?
Gary Boomershine: In California 9% or 10% is what I’m typically getting. I’m doing only California, Joe, when I lend. It’s pretty easy; the typical lending rates right now are 10%, probably similar to other parts of the country. This stage of real estate has been going for a long, long time, and in California it’s been going nuts… I keep the loan-to-value super low, so I’m usually lending 35% or 40% LTV… Combined loan to LTV. I’m only doing first-position. So I take a lower interest rate for better product, in my own business.
Joe Fairless: And any points at closing that’s typical?
Gary Boomershine: Most of the deals I’m doing I’m actually getting from brokers, so they’re usually getting the points, and junk fees, and things like that. I’m not a broker, so I’m not brokering the deal; I’m actually just lending the money.
Joe Fairless: What paperwork do you need in order to just lend the money?
Gary Boomershine: You need a note and a deed of trust. That’s typically what you want. If you’re lending money typically in California, you really always wanna go through a licensed broker… So the brokers are gonna have to have California license, etc. But for me, what I’m looking for is I’m looking for a promissory note, a deed of trust, a title insurance, and a homeowner’s insurance, and a lender’s policy, and all the typical stuff.
Joe Fairless: What’s your best real estate investing advice ever?
Gary Boomershine: Best advice ever is people buy and sell to people that they like, trust and respect, and it’s a conversation, and I’ve found that I love talking to sellers, and especially competing, because I’ll usually win… Because sellers are not just about money; they’ll tell you it’s about money, but in reality it’s not. There’s a personal relationship. So people buy and people sell to people that they like, trust and respect… So whoever I’m working with, whether it’s a seller, it’s speak straight, talk straight. It’s probably the best from the sales perspective, talking to sellers.
And then I would also say, the real estate game is about persistence and tenacity. I see a lot of people in my sphere that haven’t been doing real estate for super-long, but they’re three feet from gold… They’re so close, and persistence and tenacity is super important.
For a lot of people, getting that first deal across the goal line is the hardest part in making it real, and everybody’s been there.
The next thing I would say is be involved in a mastermind group. That’s been huge for me. I’ve been involved in three.
Joe Fairless: Which ones?
Gary Boomershine: CG is awesome, the Collective Genius, with Jason Medley.
Joe Fairless: Isn’t that in Arizona?
Gary Boomershine: No, he is out of Florida; it’s been going for a long time. I think they have about 140 people, all seven-figure investors. Kent Clothier has got a great one called Boardroom. There’s a few others… Boardroom is awesome, the Billionaire Boardroom… But being involved with peers is really super-important, it’s super-motivating.
Every time I go to a mastermind, I’m learning — I’ll usually walk away with two or three nuggets that I know will easily make me six figures.
Joe Fairless: What’s one of them that you’ve come across recently?
Gary Boomershine: Data stacking. So cold calling is huge right now. In this particular market it’s getting more competitive for going direct to the seller, so direct mail, Facebook, pay-per-click… You’ve got a lot of people, especially people that are coming out of seminars, and the hedge funds are starting to move into off-market marketing… And cold calling – I found that from probably nine months ago from a few guys at a mastermind… They showed me how they’re actually getting phone numbers, and then their true results. We put that to work, and it was huge.
Joe Fairless: You can get phone numbers through – what, databases? Is that the best way, or is there another way?
Gary Boomershine: Yeah, but the question is what databases? [laughs] IMI is a great one. TransUnion used to have one a lot of people were using… But usually, you can take a good mailing list and be able to get three, or four, or five really good phone numbers, and it’s typically not that expensive. It could be 25 to 50 cents per success, and that’s huge.
So what we’ve found is it costs — I’ll give you the math… It’s about 170 to 190 bucks for a qualified seller, who puts up their hand and says “Yes.” That’s what we have found in the couple markets that I’m in right now. So you’ve got a good phone person that’s dialing for dollars, and it costs about $170-$180.
Joe Fairless: Sold! Sign me up. That’s a good ROI.
Gary Boomershine: Yeah, that was a huge nugget. I never thought cold-calling was a great approach, and it is.
Joe Fairless: When you said data stacking, what were you referring to exactly?
Gary Boomershine: Data stacking is kind of a hot trend… A lot of the masterminds are talking about that right now. It’s basically when you’re getting a really good mailing list, a motivated list of potential sellers. So that’s the first technique of where to go to get the names and addresses of your 10k to 20k highest candidates that would be interested in selling the property.
That’s gonna be from one series of data sources or databases, as you mentioned. Then second is you’ve gotta take that and data stack it, which is now getting phone numbers, and usually you’re having to do that to two or three different providers. So a lot of people are saying, “Hey, what’s the process and where do I go and mimic that?” That was a huge nugget.
We’re actually replicating that right now, so that we can offer that to some of our REIvault members, and offering cold calling as the capability; that’s new.
Joe Fairless: We’re gonna do a lightning round. Are you ready for the Best Ever Lightning Round?
Gary Boomershine: Sure.
Joe Fairless: Alright, let’s do it. First, a quick word from our Best Ever partners.
Break: [00:19:35].02] to [00:20:35].02]
Joe Fairless: Alright, best ever most recent book that you’ve read?
Gary Boomershine: Most recent book…
Joe Fairless: Or a recent book. It doesn’t have to be the most recent, but a recent book that you’ve read?
Gary Boomershine: I’ve just re-read Good to Great, for probably the fourth time… That’s probably one of my favorites. Three Feet From Gold is another one; that’s been out for a while. That’s a Napoleon Foundation book, a great read; that was awesome. In fact, I think I bought three or four hundred of those books. And then a third would be Traction. We’re a huge Traction fan, by Gino Wickman. That’s actually been a life-changer for us, by the way, for us real estate investors. It’s a really good business management model for growing a staff.
Joe Fairless: Best ever deal you’ve done that you have not talked about yet on our show?
Gary Boomershine: Well, I’m living in one. Actually, one of the best deals was a seller that called to be asked to be taken off the mail, and I ended up picking up that property and living in it today. That was an interesting, creative deal. I bought with a quarter of a million dollars of equity in it. Then another one was —
Joe Fairless: Let’s just talk about that one… They called to be asked off the mail, someone called back, and what happened?
Gary Boomershine: So my wife and I were actually searching a very small area in a town that we wanted to live in, so I was marketing to about 120 properties… And I figured out how to get almost 100% response rates; I’m not gonna share the secret exactly, but I got 100% response rate.
I ended up getting one of the callers – she called and asked to be removed from the mail; every one of those we called back… I called her personally, had a nice dialog, it turned out that the family – my wife, actually – was in a group with her and she didn’t even know it, and ended up having that conversation… We sent her a couple of our follow-up letters, and the third one she called back and said “Hey, are you still interested in buying my property? I’m now ready to sell.”
So it went from somebody that wanted to be removed, because she didn’t know us, to turning it into a property that we ended up purchasing, and we still live in that house. That was 2010.
Joe Fairless: What’s a mistake you’ve made on a transaction?
Gary Boomershine: Oh my gosh, what mistake haven’t I made…? I don’t like rehabbing. I’m much better on the front-end, and I ended up buying a property and I had to rehab it three times. It ended up getting broken into… This is actually a property in Southern California. It was probably the worst. I still ended up making money, but I realized years ago I really don’t like rehabbing.
Joe Fairless: Best ever way you like to give back?
Gary Boomershine: Gosh, where do I not like to give back? I love going to San Francisco and bringing my kids, and there’s a group called City Impact and Richmond Rescue Mission in Richmond, California… It’s probably one of the best things that I’ve done with my family. We do it at Christmas and Thanksgiving – we go and deal with the homeless, and just love on them… We try to do that every year. So rather than focusing on our own present-sharing, it’s always great to go and give to others.
Joe Fairless: And how can the Best Ever listeners get in touch with you or learn more about your company?
Gary Boomershine: Yeah, REIvault.com is probably the best place to go. REIvault.com walks through exactly what we do, and this is a membership model, so if somebody’s interested, they can fill out an application; we’ll jump on a phone call, share what we have, see if there’s a fit, and if it’s a great fit, then we can make a decision together to work together.
Joe Fairless: Do you do large apartment buildings?
Gary Boomershine: I did, and I’m totally focusing on single-family right now. The last apartment I was in and out of was in Sacramento, California…
Joe Fairless: I’m talking about for REIvault, the direct mail.
Gary Boomershine: Oh, yeah. You know, Joe, probably 95% of our members are doing single-family… So we’re much better at single-family than we are apartments. We have a few people that are targeting apartments, but we’ve found — as an example, direct mail is not necessarily the best way for finding apartments. It’s usually referrals. and bird dogs.
Joe Fairless: Well, Gary, thank you so much for being on the show, talking about REIvault, talking about your experience as a lender, as a wholesaler, and giving some tips for Best Ever listeners who are doing direct mail and having those phone calls… If they want to scale their business, well, one, they could work with you all. But if for whatever reason they don’t, then you have sharp, knowledgeable and friendly in-house sale team members… And then when those hang-ups do take place, call them back within 15 minutes and just say “We’ve just got a missed call from you… Are you calling about…?” and then ask them. That way you get them to start saying yes, and then you can continue the conversation from there.
Thank you so much for being on the show. I hope you have a Best Ever day, and we’ll talk to you soon.
Gary Boomershine: Awesome.