Podcast | Real Estate Investing
Erik Bee is a multi-skilled business starter, real estate educator, and funnel marketing expert. Erik’s gone from motorcycle riding appraiser to Fortune Builder mastermind to the brains behind Real Estate Funnel Systems. He now spends his days focused on the data science driving marketing funnels and leads for some of the industry’s biggest real estate companies.
From SMS marketing to SEO to direct mail, the marketing game is definitely a pros game. Have questions or feedback? Each show is posted on the Data Driven Real Estate Podcast #8 in our community. Catch pre-show research and continue the dialogue online after the show. Check out our recent listing on Top 25 Real Estate Podcasts, too! Connect, subscribe and like on: YouTube, iTunes, Spotify, Stitcher, TuneIn, Google Podcast
- 00:00 The Data Driven Podcast Welcome Erik Bee of Real Estate Funnel Systems
- 01:48 How did Erik Bee go from a motorcycle racing appraiser to real estate funnel marketing expert?
- 05:17 How the appraisal game changed drastically during the Great Recession and how it changed his career
- 09:10 With no money, how Erik started with trustee sale auctions and why someone financially back him
- 14:45 Than Merrill, Fortune Builders, and making connections at the local real estate investment association (REIAs)
- 15:51 The guru real estate educators and who is to blame for people not succeeding in real estate investing
- 20:19 Learning from Than Merrill, CT Homes and running marketing in San Diego
- 22:33 Why equity deals were so difficult to land in the Great Recession
- 26:40 Why do people outsource marketing funnels?
- 29:42 Does a marketing consultant use the same tools and strategies with all clients?
- 35:36 What is a real estate sales funnel?
- 37:20 Is there a target conversion ratio for marketing?
- 37:27 The power of SMS marketing and the importance of compliance
- 39:04 Examples of SMS failure and not staying compliant
- 39:54 How your marketing can get you blacklisted from the Internet services providers
- 41:52 How cold email campaigns can destroy SEO on top of getting your domain blacklisted
- 42:53 Why SMS marketing is currently Erik’s top strategy and the data-driven results Erik is chasing
- 43:58 Other integrated marketing strategies employed to create holistic real estate funnels that drive conversions
- 45:01 What is RVM for marketers?
- 45:06 Current issues with ring-less voicemail messaging that marketers need to know
- 45:48 Is direct mail still an important channel for real estate investors in 2020?
- 46:13 The number one reason Real Estate Funnels Systems starts with text message marketing, then Facebook lookalike advertising, and ends with direct mail
- 47:22 Is real estate marketing funnels people-centric or market-centric?
- 48:58 How important is it for a real estate professional to have a strong online presence?
- 49:51 The number one social media channel that real estate professionals should focus on
- 52:20 Why some real estate investors don’t put websites on bandit signs
- 52:42 Some side benefits of setting up a professional online presence that some people miss
- 53:16 The big risk of only focusing marketing resources on social media channels
- 53:49 How effective is social media advertising in 2020 for real estate professionals?
- 55:09 Why YouTube is changing the game for marketers
- 57:01 The shocking number of YouTube views tied directly to its algorithms
- 58:43 The metrics behind SEM paid ads for real estate professionals.
- 59:15 Aaron’s embarrassing story of paying $1,000 per click for paid ads that never converted
- 1:03:22 How leading service in mind keeps real estate pros focused on trends and landing more deals
Aaron Norris [00:00:02] Hey, everybody, and welcome to the Data Driven Real Estate Podcast. The podcast for real estate professionals dedicated to driving business success through data. My name is Aaron Norris. And with us today, we have Eric Bee. Eric Bee is going to share with you some insights on how he went from an appraiser to real estate investor and eventually a consultant. But he's got a two-year, hilarious journey before he finally pulled the trigger that only a true data geek would appreciate. We also talk about the importance of funnels. What is it? And his role as a consultant driving leads down funnel strategies that work, strategies that are changing because of Covid-19. And we also talk about marketing through the framework of the PESO model paid, earned, shared, and own the importance of each of those channels to drive authority, looking at the data that matters most. You won't want to miss this week. Let's get started. Hey, Eric. Welcome to the show. Thank you for being here. I, worked on this list of questions. That is, by the way, in our portal. It's where I sort of in our community, what I do is I sort of build the line of questioning that I think I'm going to ask. Doesn't mean I'm always going to get to all of these. And I have a feeling you and I are going to get to all of them today. But I really appreciate you taking the time. I would love to start with your journey, how you got into real estate. You became a marketing expert. After high school, where did you go?
Erik Bee [00:01:20] Yeah. Well, thank you. I mean, I appreciate it. And I'm deeply honored to it to be here with you. I have been I've been following, you know, you and your father for a long time, and it's cool. It was a fun, fun way to connect. So thank you for having me here and I really appreciate it. Man, my journey like crash. You know, it's been, it's been a lifetime for me. And honestly, you know, you always kind of get that question how long you've been in real estate. Right. And for me, the honest answer has been my whole life. I was born and raised in a family. My dad's a real estate appraiser. He's still appraising in his twilight years. Out. Wow. Yeah. You know, he's still doing it. And but so, like, my first job was and I'm sure you have similar stories, but it's like my first job was painting the rental house, you know, like in doing the mowing the lawn over there and taking care of this. And because that's it was a family business. Right. You know, just. And not on a grand scale of anything, but that's what our family did. My dad was an appraiser. My mom, you know, stay at home. And number one mom and, and landlord. Right. So we're always doing that. You know, that was the business. And so that's how I grew up. And so right out of it, it was a lot. My dad's a lifestyle guy. And so I grew up in a very active family. So I was competing in a lot of different things. My dad's a motorcycle racer, skier. And so we know we were doing, you know, very, very active family. And so that's just the environment that I grew up in. And so I was had my sport and I was competing at high levels and through, you know, 18, 19 things start getting serious, you know, and if whatever you're doing, you know, if you're passionate about what you're doing, it's starting to get the talent is showing up. But that was ages. And so for me, it was motorcycle racing. And I was traveling all over and doing that. And it might get with my dad, you know, and so we were just, you know, doing this together. And so right out of high school, I got into appraising, went right into the family business and got my appraisal license and just went with the lifestyle, with my, you know, I could immediately, I knew recognized that the door of real estate was in front of me and that, you know, I had the opportunity to learn it and to get to know it and that my dad is my best friend and I really respected the way he did his gig. And so I just really connected with that. And so I did that and it allowed my opportunity to make grown-up type money. Right. At a young age. Right. And had the flexibility of my time. So I was traveling all over and I was appraising and I could come back and I could disappear and I could come back and disappear and I bought a house at a young age, you know. So I was just like doing, you know, more grown-up activities when my friends were in college and partying a lot and, you know, and doing a lot of different things, I was always kind of on this, like, professional track, although it was also mixed in my lifestyle. So that's the answer. I was really just passionate about my my my lifestyle in real estate was the answer there.
Aaron Norris [00:04:49] It was the gateway to the means to do all the fun stuff early on.
Erik Bee [00:04:55] Absolutely. And so that led to like six years of appraising full time, you know, from 2000 to 2006. That's all I did was a praiseful time with my dad. So two to three appraisals a day.
Aaron Norris [00:05:07] Oh. And then '06. So clearly.
Erik Bee [00:05:10] Right, there it is.
Aaron Norris [00:05:13] Into the Great Recession. All right. Walk us through it.
Erik Bee [00:05:17] Yeah. You know, what a great learning lesson. So as an appraiser. Front row seat. Holy cow. Right. You know, looking in hindsight, man, like all of the signs and everything, I was like I said, it affected the family business in every way, affected business relationships in every way. It was like I get goose bumps when I tell the story because it well, the ripple effect in the scars. You know, like, yeah, it's crazy. So, you know, of course, we survived. My dad did everything else, but this was I mean, Zillow, the automated valuations were getting more prevalent, you know, and then more accurate. And all of a sudden, you know, like, holy cow, I remember dinner table conversations, is appraising still going to be around? You know, Zillow is a Seattle company. So I'm born and raised in Seattle and. And, you know, so, like, Zillow was always on the forefront of us as appraisers. And the appraisers are an older community. And I'm the youngest appraiser by 20 years in any class, in anything and anything I did was always 20-year, minimum, younger. And so it's just kind of watching all this stuff. And I always knew, like, you know what? We got to hedge our bets with real estate game. And my dad was like, man, just I know you and your personality. You gotta get your broker's license, start looking at different angles within real estate to start playing, you know, buying real estate. Just look at it from different angles because who knows what's happening right now with the liar loans and this than that and the, you know, the bubble of the way it was coming down and the leverage to the appraisers that, you know, that were inflating the ah, the refies. And, you know, like I remember those being on my desk in, like, the ethical battle of like, you either are going to get this value or you're not going to get the job. You want more jobs in the future? You're going to get these values. You get it. That stuff was around all over the place and it was like, holy cow. And then the appraisal management cut the fees and all this stuff and so like. Yeah. So I had to get diverse in real estate. So I got my broker's license and I had my appraiser license for five years. And so I got to skip right to the broker status.
Aaron Norris [00:07:36] Oh, OK.
Erik Bee [00:07:37] You know. Right. Because there's that you're exempt, you know, after you have five years of appraisal, licensing and everything else. So. So I got to get my broker's license right away. And so I was doing traditional real estate appraising, you know, and then buy, fix and sell, you know, like, oh, OK. Now, like, remember, I was just listening to Sean O'Toole and his enter in with ForeclosureRadar. I remember when ForeclosureRadar became a thing. And I remember being like, holy cow. Like that changed the game. Like for the people that were, if you remember before, you know what a market was as far as just access to data, consistent data, things were that were accurate. You could. I used to during this time, I was so curious. I remember the aha moment when I realized that people bought real estate at below market value. Like wait a minute. So most people, everybody buying at market value, that sets market value. But then there's some people that buy below market. How much? Oh, hundreds of thousands below. Sometimes, like, I remember that just being like, holy cow, there's a whole underworld of real estate. And I always looked at this lens of retail value and I was ... I'm the appraiser. We you know, all these things. Right. And so I just remember when I just that game just kind of clicked for me and I was like, whoa, OK, I got to study this. I got to know this. And so I didn't have money. I didn't understand hard money. I didn't understand the game for really what it was at this moment. But I started going to the foreclosure auctions and just studying. And just in my wife and I, we were crazy this way. We went to every foreclosure auction for like two years every Friday and just showed up in and just it was turned into networking. Right. You know who's there. OK. OK. What's he buy. Okay.
Aaron Norris [00:09:40] Bring your snacks.
Erik Bee [00:09:42] Who's talking crap on who. Ok wow. This though that's how these two play against the. Oh I started seeing the game for what it was.
Aaron Norris [00:09:50] Two years?
Erik Bee [00:09:51] What's that? Two years I, I went every Friday in my local market for two years in, but I every time I did I picked five houses that I would hypothetically buy. And so I would appraise them prior. So like through the week I would pick five houses. Then I'd go drive them because I'm out in the field doing appraising anyway. So I'd just be like, OK, then I would nail down my opinion of value of it. So then when I go to Friday, it would be like I would have my files and it was as if I was buying. I would like mach play, kind of, you know. And then I would see what they would actually sell for. So I would get the perspective of like, OK, this is what the value is. Here is the comps. This is what it is. This is what it sold for.
Aaron Norris [00:10:32] Wow, what a great idea.
Erik Bee [00:10:33] Oh, just start watching it like, you know, like, OK. So then I started trying to figure out the math. OK, so they makin' how much. OK. And then, in the end, I was doing this kind of obsessively, if you will, in that moment where I just built files. I treated it like an appraisal. It was just the same process. So I had a little file and I had a file cabinet in. My dad's friend came over, you know, in the appraisal office. And at one point, like, what is that? And I'm like, oh, this is what I do. I go on Friday. I tell him my super... you know what I do? And he's like, Man, I can't believe you do this. Like, when are you going to finally buy one? And I'm like, I don't have money, you know? I don't know. I don't like... Still learning. Right. Still connecting. Right. Just like I. I don't know. You know, and it's like, well man, you can do it this way, this way or this way. And he started talking about Lending. Well, I could lend you money, right. Oh, private money. Oh well, I have this line of equity that I know that I have five percent not shoot. I'll lend it to you at 10%. And oh, holy cow. So then, this dots started connecting and they started showing up to the auction with a loaded gun. Right. Kind of with a check and then. But I never bought one. I came really close because I learned that that's the riskiest place to buy.
Aaron Norris [00:12:06] Yes. It's we've covered that a few times on the show. At the trustee sales, particularly in states like, I don't know the other markets, but California...brutal. My brother was in that space for a really long time. And I mean, he had a CRM system,he was using PropertyRadar, he had built a custom CRM system where he knew the people that were bidding and for what companies? And if you showed up green, they would run you up. So you never showed up again. It was brutal. So good for you. I mean, but wow, two years of never pulling the trigger.
Erik Bee [00:12:35] Yeah, two. Well, so it was it was about 18 months of like going there with no money. And then he was like six months of going there with a loaded gun, you know, like, you know, I had a cashier's check and I'd show up and I was like, nervous having them, you know, with go through all that stuff. But I was really strict on my numbers, you know, like I just like there is the line in it. And I remember that emotional jousting in the eye to eye contacts that I have. I mean, it's like it's game time, you know? And and so...
Aaron Norris [00:13:09] I knew your metrics and your data, though, that key. So good for you. That says a lot.
Erik Bee [00:13:14] Yeah. And so but then the wholesalers that I figured out like, oh, you can buy stuff from these people in this than the other thing. So that's my entrance....
Aaron Norris [00:13:22] OK, so other avenues to buy besides trustee sale. OK.
Erik Bee [00:13:26] I love my entrance, you know. Oh you know, like OK. You know, I can actually perform due diligence on a property before I buy it. Oh wow. OK. There's other opportunities. Other avenues. OK. This is the Wild Wild West. Those are really gunslingers. Those are the real...That. OK, got it. You don't need. Oh you can play over here. OK, you know, I mean, I just figured that out that like, you know, like there's different ways to play the game and different approaches. And so I started to develop that and get really interested in volunteering to all the REIAs, you know, like that's what I did. You want to know the truth. Like, I'm a kind of a grind-it-out guy. If you can't tell, like, I'm a, I show up enthusiastically to work. I like that. That's how my dad is. That's how we play our sports. And, you know, so like I show up to REIAs and, and I volunteer. What do you guys need? How can I help you with that?
Aaron Norris [00:14:22] Is that how you sort of fell into the Fortune Builder's game?
Erik Bee [00:14:25] Everything.
Aaron Norris [00:14:26] Wow.
Erik Bee [00:14:27] Everything I do is like around that principle.
Aaron Norris [00:14:30] So the Fortune Builder brand. I mean, obviously, Than Merrill is very well known, the TV show. What was your role within the company while you were there?
Erik Bee [00:14:40] Yeah. So, you know, that's kind of where it where I'm going here is like that's exactly where I met Than. I was at a REIA event in my local town in 2006. Right when all of this was really happening and in city homes had was they were on TV at that point, I, I never I didn't even hear I wasn't watching TV much. And so it wasn't that wasn't anything to me. I was just there at the REIA. But Than Merrill at the front of the room and Than Merrill like at that time, you know, like it was just kind of one of those moments where, you know, we just connected, you know, like hit his presentation, me in that moment, there were the whole thing just like, boom, we were their beta students. We didn't know it at the time, but we they were very young and they were just doing their first boot camps. And we were. Yes, yeah. We'll go being enthusiastic. They're having a resumé and being a doer. And it's not that I had all these tremendous results per se except for, say, already a decade or six years in the industry. Right. And a very thorough understanding of what it is. So I brought insight.
Aaron Norris [00:15:54] I definitely think the guru education definitely gets a bad rap. I actually heard a lot of good things specifically about Fortune Builders because they were really focused on a lot of tools and funding and everybody learns differently. I think that's what's interesting. Some people really need a format. They want that boot camp experience sort of like a classroom. You know, it's like getting your MBA. Like, for me, I know I educate best with a format where I'm consistent showing up. If you leave me on my own, I'm not always good. So everybody learns differently. And all the education out there, it's built differently and works for some and not others. And there's a very small percentage of people who pull the trigger and ever execute. So nothing necessarily to do with the educator and more to do with the person involved. But you are already well on your way to being in executing the business. Just what did the boot camp format do for you that made you pull the trigger?
Erik Bee [00:16:49] Yeah, it's a great question and something that really, I think is important, because what I learned is that there's a lot of enthusiasm in sales. OK. And so a big part of sales in general is enthusiasm and getting people into that moment of belief into wherever they're going. And that's sales and anything. Right. But in this guru seminar sales, they're really great at creating energy and belief and that are done. And so they get a lot of people that that fire in and go and pay big money for different education. Unfortunately, what you see is just that enthusiasm drops off under the radar. And a lot of people don't make their investment. They don't they don't get out what they put in it. It happens a lot. Now, Fortune Builders, I can tell you with the thing that really what I connected with them is that Than is, he's a tremendous leader. He really is. And the thing about Fortune Builders, man, that he inspired the whole his whole company that way. So fulfillment was that way. And so that's a big difference when you not only when you have a front and sales with all that energy and belief and it. People come into, you know, anybody can play real estate and you just got to learn the game. Anybody can do it. It's the truth. And I've seen it go zero to hero all the time. And so you get it. You get that. What Than, though? What I believe in. You know, I had my little sliver of part of this was just doing the business and carrying that energy through the fulfillment. So leading people into action that way in with good ethics and integrity and showing them, you know, the true business for what it was in a very systematic way that, you know, if you were to really follow the steps and really take the action and do it, you know, oftentimes you have to show up with enthusiasm. You can't just show up with a pulse, but you've got to show up and do it. But if you do it. There's a result to be had.
Aaron Norris [00:18:53] Yeah, I think there's a misconception that this business is easy and I think HDTV has ruined a lot of things, that it's so shiny and packed, packaged in an hour's show. But I don't want to focus too much on that. I just. It's important for, you know, just the sake of we're gonna talk a little bit more about data and how complex it's gotten. But you've really worked. You coming up through the appraisal, getting your broker's license, being a real estate investor and then operating sort of in the education space. You see why people win and fail. So it's an important conversation as we get into really where you've gone. So in Fortune Builders you got more into the marketing side. You really helped them a lot with their marketing. And I have to say, I've probably been in marketing now well over 20 years. The last 10 years has been insane. The different channels I have to focus on, the amount of just reaching people, breaking through all the noise has gotten so much more complicated. Marketing.