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Joe Fairless: There needed to be a resource on apartment syndication that not only talked about each aspect of the syndication process, but how to actually do each of the things, and go into it in detail… And we thought “Hey, why not make it free, too?” That’s why we launched Syndication School.
Theo Hicks will go through a particular aspect of apartment syndication on today’s episode, and get into the details of how to do that particular thing. Enjoy this episode, and for more on apartment syndication and how to do things, go to apartmentsyndication.com, or to learn more about the Apartment Syndication School, go to syndicationschool.com, so you can listen to all the previous episodes.
Theo Hicks: Hello, Best Ever listeners, and welcome to another episode of the Syndication School series – a free resource focused on the how-to’s of apartment syndication. As always, I’m your host, Theo Hicks. Each week, we air a single syndication school episode that focuses on a specific aspect of the apartment syndication investment strategy, and for a lot of these episodes, we release free resources, especially the ones earlier on. These are free PDF guides, PowerPoint templates, Excel templates, something that’ll help you along your apartment syndication journey. All of these free resources and past syndication school episodes are available at syndicationschool.com.
Today, we are going to be talking about the radio. So I’ve interviewed a couple of people on the best real estate investing advice ever show about their usage of the radio to grow their real estate businesses, and so I want to talk about two episodes in particular. One, I did with Chris Arnold, that is Episode 2150, and the other one is with Erick Hatch, which has not aired yet, but I would imagine it’d be airing in the next few months, so keep an eye out for that.
So both of them are wholesalers, fix and flippers, and the did their lead deals using the radio, and I’m going to talk today about how you can use the radio to not only generate most likely smaller apartment deals — I’m sure it’s possible to get 100-unit, 200-unit deals on the radio, but most likely you’re looking at smaller, 50 and below… But more importantly, how you can start to generate potential investors interest and start to grow relationships. Obviously, depending on whether you 506(c) or 506 (b), you’re gonna have to approach it differently, but I’ll go into more details on that second step.
The first step is how to find deals, and that’s through radio ads, and the reason why is because– and I didn’t know this, but the radio reaches around 90% of adults, and since adults are the ones who are selling real estate and listening to the radio, that is a great way to generate leads. Again, this is most likely going to work for smaller deals, but I don’t see why this wouldn’t be a strategy you can use to generate apartments. So someone uses this and it works, let me know for apartments because most of the time, I hear about it for smaller deals, but the cost is so low that I would imagine it would make sense to attempt to do this for apartment deals. If you can get a hold of some mom and pop owners who listen to the radio, that’s probably your best bet.
So knowing that – Chris Arnold, we’ll start with him. He has done over 2,500 deals on the radio. So essentially, the strategy is four steps. Very simple. Well, I guess, first, another reason why he uses the radio is because most people listening to this who have read the title and said “The radio? No one listens to the radio anymore”, but they do. A lot of people listen, but not a lot of people advertise real estate on the radio. So there’s a massive supply and demand imbalance. You’ve got a lot of people listening to the radio potentially wanting to sell their deals, whereas there’s not a lot of people talking to them on the radio.
So the four-step process – number one is to define your target audience. So if your goal is to target mom and pop investors, so demographic over the age of 50, let’s say, which is the target demographic for Chris, then you have to think of what their motivations are. So if they’re over the age of 50, they’re mom and pop, then their motivations are to retire, maybe they’re tired of being a landlord, maybe they inherited an apartment from their parents who recently passed away… So since that is his target audience, then the next step is to create the advertisement targeted towards that audience.
So again, let’s go with 50 mom and pop, maybe they’re looking to retire, maybe they inherited the property, maybe they are tired of being a landlord. So the advertisement isn’t just some vague, “Hey, we buy apartments. Let us know if you’re interested in selling.” It’s very specific and talks to and touches on the pain point of that target demographic. So in his advertisements, he’ll say, “Hey, are you retiring? Are you tired of being a landlord? Did you inherit a property? No problem, we can buy your property all cash. Just give us a call on–” whatever number it is. So if you listen to the episode, he goes into detail on what his exact messaging is, but the most important thing is you need to mention the pain points, the motivations in your advertisement.
How you actually create your advertisement – you can either do it in home with a microphone, because again, it’s just audio, and if you don’t have the proper equipment, then you can use a local radio station studio. They’ll allow you to use their studio assuming you pay for the advertisement, which brings us into number three, which is how do you find a radio station.
Of course, this goes back to your target audience. So once you’ve got your target audience defined, you’ve got your advertisement script written, then you figure out where you’re gonna air the advertisement, what radio station; which is actually pretty easy. All you need to do is figure out what type of music the target audience likes to listen to. So if you’re talking about the demographic that’s 50 and older, then they typically will listen to classic or old rock stations, and so you want to focus on those stations. If your target demographic is in a rural area, then country music, he says, are best. If it’s in a city, hip-hop or urban station might be better, or R&B, pop and hip-hop would be your best bet. But most likely, since you’re targeting the older demographic for these mom and pop investors… Classic, rock, old rock, country music stations will probably be your best bet to generate those leads.
Now, this last step is very interesting, which is to negotiate the pricing. So once you’ve identified the radio station, what most people typically do is they’ll call into the local radio station, and then they will ask for the media packet, and then they’ll get a media packet, which is a PDF with the various packages they offer, this many spots per month, and then there’s a price, and then they’ll just pay the price. So what Chris does is he’ll pull reports on the value of the radio station prior to calling, what the actual value of the time on the radio is, and then based off of that report, he’ll calculate how much the advertising spot– it’s a 60-second advertising spots, I think, he says he gives 100 per month. So he’ll calculate, “Okay, so 6,000 seconds.” So he’ll calculate “Okay, how much should I be paying a month for 6,000 seconds of ad time based off of this radio station’s value?” And then when he calls in, rather than saying, “Hey, can I see your media packet?” he says, “Hey, I did research and here’s how much money I’m willing to pay for the spot.” So start there. Obviously, not every single time they’re gonna not just say, “Oh yes, sure. We’ll take that”, but it’s much better to do that to at least know if the dollar amount in the media package is way inflated and overpriced, and then you can get a lower rate.
So Chris pays $1,500 for 100 60-second ad spots per month. So three spots-ish per day for $1,500 dollars per month. Now obviously, this price is going to vary depending on where you live. Chris does this in, I believe, Dallas, Texas. So he’s in a pretty big market. So again, this is more for finding deals, and I think, since this is only $1,500 dollars, I think it’s worth trying for six months to see if it works because again, one apartment deal will far outweigh the costs associated with advertising.
But the other episode with Erik Hatch, I think, is gonna be more interesting, because rather than airing ads on a radio station, he says he has his own radio show. When he told me this, I was surprised because I had this conversation with him and we had gone over all the various things he’s involved in in real estate; he does a lot. He does real estate software and he does deals himself, and then he also has a show on a radio station. So the reason why it’s not that difficult to get a show on a radio station is because they’re actually looking for content from people that they don’t have to pay.
So the way he explained to me is that if they want to fill an hour show, a three-hour show or any FM radio station, AM radio station, they reach out to someone, and then they pay this person money every single day, every single week, every single month, every single year for their show. And obviously, they make money by doing advertisings on that show and then commercials on that show. Whereas if you, the real estate investor, wanted to start a radio show and you reach out to them with your interest in starting a radio show, well, you pay them. So it’s way better from their perspective to have you host a radio show than it is for them to pay, assuming that you actually bring and attract listeners.
So what he does is he’ll do a show — and this is something very familiar to your traditional thought leadership platform that we’ve talked about a lot on this episode. So he did the show and he’ll blog about it. He’ll usually record his show in video format, and so he’ll post clips to YouTube about it, social media about it. He’ll tag the guests that he has about it… And it allows him to be perceived as the local expert, which again, we always talked about that with the thought leadership platform.
So what he did is he started at the most popular station first. Again, going back to that defining your target audience, and then figuring out what music they listen to. So in this case, if you’re looking to attract passive investors, whatever your criteria is for your passive investor, which we’ve talked about on the show before, how to define that, so you can check out that episode, then you need to figure out what FM radio station to do your talk show on, or what AM radio station to go on and do your talk show on depending on what high net worth individuals are listening to on their way to work. And he’ll just talk about investing. He won’t say, “Hey, I’m looking for deals,” or, “Hey, come invest in my deal.” He just talks about real estate investing. He gets his name out there and positions himself as an expert in the area. So if you’re on the radio talking about real estate all the time, and you’re interviewing real estate investors, you’re gonna become pretty well known, and people are gonna know who you are. So I guess technically, this could help you find more deals. The brokers will know, “Hey, you’re that guy on the radio station.” You’ll be more credible in their eyes and they’ll more likely be willing to give you their off-market deals.
Something else interesting that he says he does is he’ll have vendors advertise on his show. So he’ll do a live read. So rather than the commercials which the radio station makes money on, he’ll do live reads during his actual show. So does this sound familiar? It sounds a lot like a podcast or a YouTube channel, and as opposed to just posting it on iTunes, you take a step back, and the conception of the content is the radio show. So you do the radio show, and then that audio gets uploaded to the podcasts app, the iTunes app, all the other podcast apps; that’s audio.
You can go on YouTube as video, you can make your clips and post it to social media, you can write blog posts about this radio show, and you’re getting the added benefit of it being on the radio, as opposed to just being a podcast. And I’m not sure what’s even better – because he didn’t necessarily talk about how difficult it is to get a radio station to accept you, but he started this a while ago, and he does 20 to 30 flips per year. That’s what he does deal volume-wise. And if you have an existing podcast, and you can show the radio station when you call them and say, “Hey, I got this podcast. It’s got this many downloads, this many reviews, this many weekly listens. I want to do a one-hour show,” then you start at the most popular radio station and work your way down until you get someone to say yes.
As I mentioned, I’m sure you could technically use this to directly market for the leads. I think the better strategy here with the radio show is the same reason why you create any thought leadership platform. One, it’s for your own education. You can create your own customized education by deciding who to interview. The other benefit is that you’re already doing it. If you already have a podcast, it’s not that difficult to transition that to a radio station, because you don’t have to go in there — you can go in their studio, but you can also just record in your own home studio, especially if it’s just going to be audio, and then you send that in and then they just press Play. So that’s the other benefit.
I think the main advantage is going to be in regards to becoming the expert in your local market; becoming the go-to guy for real estate. Everyone knows who you are, you’ve interviewed a lot of people in the market, and then not only can you use that and leverage that when you’re talking to potential investors, but you might get people actually reaching out to you and asking if they can invest in your deals, and then you get to know them, and then they’re legally allowed to invest in your field.
So two ways to use the radio. One is to use it as advertising, legitimate advertising commercials, and the other one is to use it as a thought leadership platform. So again, very interesting strategies, very unique strategies that not a lot of people are doing… And especially now, recording this in August of 2020, when essentially everyone is still working from home, this is going to be, I think — people can begin to expand their future business by expanding what they’re doing right now and using the extra time that they have to grow and evolve into different marketing strategies, into different ways to find deals and tap into things that you might not necessarily have thought of before or had the time to pursue.
So at the very least, people should be doing a thought leadership platform, and doing a radio show is just one example of that, that I think, has a lot of promise. I remember I was really excited after talking to Erik and hearing about all the success he had on the radio station and how seemingly easy it was. All he did was just call and ask, and he asked a couple of times, just like when you’re cold calling. He asked enough people until they said yes, and now he makes money via advertising, he gets to talk to all these great guests, he’s an expert in the area, everyone knows who he is. He’s finding deals, he’s finding private money… And he didn’t say how much he paid for the radio station, but again, do one deal and it pays for itself.
So that concludes this episode, How To Use The Radio To Grow Your Apartment Syndication Business. Make sure you check out those other syndication school episodes we have from the past, as well as those free documents at syndicationschool.com. Thank you for listening. Have a best ever day and we’ll talk to you tomorrow.
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