The Marketing Move I Regret
The Marketing Move I Regret
How can entrepreneurs maintain a growth mindset focused on strategic success?
If you're consistently investing and staying lean, you're always looking for new business or investment opportunities. You keep a growth mindset, but you're not just spending money for personal enjoyment—you're focused on growing other businesses and adding value.
Why should business owners prioritize long-term investments for growth?
I have a very different lifestyle mindset from my parents. They split up when I was five. My mom and stepdad are very conservative. They worked responsible jobs in banking and insurance until retirement, and now they have a modest lake house near Table Rock. My stepdad is still working until he's 70.
On the other hand, my dad lives very minimally—he travels the country on a tight budget, working seasonally, like at Kitty Hawk Heights in the summer. I respect their choices, but I don't want to be limited by income. I want to retire or step away from work when I choose.
I also have a daughter who is about to turn six, and we pay for her private school to give her better opportunities. I want to do bigger things in the future, like building sustainable housing and vehicles. I’d love to have the capital for larger developments, but for now, it's easier to invest in single-family or small multi-family properties.
My goal is to eventually move into larger commercial developments and manage commercial syndications, much like a hedge fund. I’ve started brokering hard money loans as well since I’ve used them myself. I believe in delayed gratification, and continually investing to create bigger opportunities for my family.
One of my investors shared a parable about two people on their deathbeds. One said, "I finally paid off my house," while the other said, "I finally have enough money for my dream home." It was a lesson about debt: good debt, like asset-based debt, can pay for itself over time. The key is to invest wisely, be patient, and let those assets grow and pay themselves off. This investor started with 50 single-family homes and now manages healthcare and assisted living facilities on a much larger scale.
What strategies help scale a business through online marketing and lead generation?
The way I scaled my business was by investing heavily in online marketing. I started small, spending around $300 a month on platforms like Zillow, Facebook, Homes.com, and some newspaper ads. Over time, I increased that to $10,000 a month, with $8,000 going to online buyer leads. That investment significantly accelerated my growth.
By 2019, I was able to stop spending on buyer leads and focus solely on advertising for our listings—paying for photos, boosting open houses, and similar tasks. We had built a strong referral base and a database of people who know, like, and trust us. Whether you grow your business organically, through paid ads, or a combination, building a solid database is essential for repeat business.
To scale, you need to be proactive in networking and consistently generating leads. Understanding the numbers is crucial. For example, in our business, only about 2% of online leads convert. That means for every 100 contacts, only two will result in a closing. If you want to close 50 properties a year, you need thousands of contacts.
In my case, I didn’t have a pre-existing network when I started. I had only lived in the area for three years, so I couldn't rely on personal connections like friends or former classmates. I had to build my business through paid marketing, which eventually transformed into organic referrals as I developed relationships with clients and investors.
The principle remains the same: build the pipeline. Early on, I relied on paid advertising, but over time, those paid leads turned into organic traffic because I built strong relationships. It’s all about maintaining those connections and continuing to nurture them.
Why should business owners avoid overcommitting to marketing expenses?
One of the mistakes I made was overcommitting to marketing. Zillow is a great resource for agents and for people searching for properties, so I hired three buyer’s agents and built a real estate team. The idea was to provide them with as many leads as possible so they could increase their business. I went from spending $4,000 a month on marketing to $8,000.
Unfortunately, some of those agents left due to personal reasons, and suddenly it was just me and one other agent managing the leads that were meant for four agents. I still had a six-month contract for $8,000 a month in marketing costs. With contracts like these, if you don’t pay, the leads stop, and it goes into collections. So, I had no choice but to continue paying, get the leads, and then modify or end the contract after six months.
It was an expensive lesson. We had to use credit cards to cover the costs, and I had to work extra hard to sell enough to keep up with the marketing bills. I’ve always been creative with financing and never missed a payment, but it was definitely a situation where I bit off more than I could chew.
Additionally, we had a co-marketing lender who decided not to continue, which made the situation worse. They weren’t locked into a six-month contract like I was, so when they left, I had to cover their portion. It taught me the importance of having solid agreements with strategic partners and not taking on too much at once. My wife still reminds me of that decision, and there’s wisdom in making sure we’re on the same page.
What value have you gained from networking and masterminds?
Attending meetups and mastermind events has been incredibly valuable for me. One of the meetups I attend is a real estate investor meetup held on the last Thursday of each month. I’ve also attended several mastermind events, including an investor weekend in 2020 just before COVID hit. That event was especially powerful because it connected me with people who opened my mind to new concepts.
One contact I made was a real estate investor who had never used a bank to buy property. He started in private banking after transitioning from being a pastor, so he didn’t have an income when he began. Now, he has bought 50 to 100 properties using private investors. He built this network by leveraging relationships with people who knew and trusted him, and he secured their investments with assets.
That experience broadened my understanding of private financing. Many people think they need 25% down and six months of cash reserves for a conventional loan. However, you can raise capital, sell equity, or use alternative financing options. For example, I’ve used business lines of credit, private money, and no-interest credit cards to finance about a million dollars in real estate this year. On the commercial side, people are syndicating down payments for properties worth $10 to $20 million.
Being creative and willing to learn is key, but you also need to network with others who are using different strategies. You won’t always know what’s possible until you’re exposed to new ideas through these kinds of interactions.
*This interview has been edited and condensed for clarity.*
