The Power of Niche Lists: Transform Your Real Estate Marketing with Josh Ax!

Mike Hambright (00:00.93)
Hey everybody, welcome back to the show. Really excited to have my good friend Josh Ax. This is a great dude. And we’re going to be talking today about really just that all data is not equal. Some of you know I also own a data, basically a data company. We have about 80 employees. We do direct mail marketing. We send millions of pieces a month for real estate investors all across the country. And Josh and I speak the same language. We’re cut from the same cloth. That all data is not equal. And…

You know, if you think direct mail is like a buggy whip and it’s outdated, it’s the truth is, is the use of data behind it is what’s gotten sophisticated. We’re using, you know, AI and machine learning and all sorts of crazy stuff. And so he was, he’s been doing that for a while. We’re going to talk today about how all data is just not the same, quite frankly. So Josh, what’s up, Good to see you. Good to see you. So, yeah, so before we dive in,

Josh (00:48.298)
Hey Mike, how are you?

Mike Hambright (00:56.302)
You know, obviously you live in the Phoenix area, but you invest in Pennsylvania. Tell us a little bit about your backstory about kind of how you got into real estate investing.

Josh (01:04.63)
Yeah, absolutely. So I started in property management here in Arizona. So learned kind of the nitty gritty crappy side of real estate dealing with tenants. And thankfully I had the better part of property management where I was working with investors and kind of quickly realized like, wow, these people are making like 500 bucks a month and we’re doing all the work. Like, how do I get?

you know, 10 or 15 rentals, then I don’t have to do anything. Like that sounds pretty sweet. so, you know, that started my learning process and then, you know, found like bigger pockets and basically just learned as much as I could. And then one of the things that that property management company did that really kind of set the foundation for me was they were all about generating leads. So they would

run PPC ads and do all this stuff. I didn’t know much about it then, but I realized they had a flow, they had follow-up systems. And my job was just to answer the phone and talk to the owner the second they submitted that form. And so I realized that like that speed to lead was super important. And like that would help 50 % of the close because it’s like, if you’re a property management company and you call them back within a minute, you know, they’re like, I just submitted the web form.

And I’m like, yeah, we pride ourselves on being fast and efficient. And they’re like, that’s all I need. 100%. Yep. Yep. So they’re, mean, and now that company, when I signed up, I think we’re like five or 600 properties and I think they’re three or 4,000 now. They’re huge. So they’ve done a lot of things, right? So, you know, from there,

Mike Hambright (02:33.528)
Yeah. Property managers generally suck. yeah, you answer the phone live, that’s a thing. Yeah.

Josh (02:56.746)
you know, started making some money and then I went to a different brokerage that, you know, they had a focus kind of on some sales too. So I was able to start selling some houses and I had like a cousin who was selling a house and lived in the same neighborhood. And so he’s like, have you ever sold a house? And I’m like, no, but I’ll figure it out, you know? And so then I listed that property.

and I gave him a sweet deal, know, 1 % or whatever, but then he bought a house the same day. And so I got like a seven or $8,000 check and it was the most money I’d ever gotten at once. And I’m just like, how do I do this daily, you know, or weekly? Like that would be insane. And so, you know, from there, it was really like, I need leads. Like if I don’t have someone’s house to sell, I’m useless, you know? And so.

Mike Hambright (03:37.089)
Yeah.

Josh (03:50.09)
The second property management company that I was with, they had me signing up owners, but then also I had like an owner database. And so, you know, after that first sale, the property manager walks down and he’s like, you know how to sell a house, right? And I’m like, yeah. And so he’s like, call this owner. They’re thinking about selling. then, then I realized like, I have this captive audience of, you know, managed properties. so like monthly, I started doing a drip where it was like, click this link for CMA.

and then started selling houses and I was like, all right, cool. Like I have a system, I’m generating leads, but how do I go outside of my captive audience? So that’s when I started learning about like direct mail. You know, I always recognize like not all sellers are equal and like not all homeowners are equal, right? Cause like a homeowner and a seller are going to be different, but then there’s different types of sellers too. So like.

you or I get a piece of mail and we’re like, that’s an interesting way to send mail, whatever, throw it away. But someone who, you know, is in foreclosure, their house is condemned, whatever’s going on, they’re going to get that piece of mail like, my God, I’ve been praying for an answer on how to deal with this property, right? So I recognize like, okay, how do I find those people? And so, you know, as an agent, it’s like, I have the expired list.

Mike Hambright (05:05.325)
Right.

Josh (05:16.768)
So I would like pull the expireds and send those. And in Arizona, we have this thing called Monsoon, which is like the tax record database thing. And so then it was like, I started mailing pre-foreclosures and like back then it was just as an agent, you know, so I was sending some mail and like the broker that I was with had one of those like postage machines. And so I’d order like a thousand, you know, just

Postcards and then I would just run him through and he’s like why is our mail bill so high? You know, so it was it was good, but he was benefiting from it too by having me do some sales and then You know, I sold an apartment building for someone or helped them buy it and then which it was actually a syndication So like looking back I’m like wow if only I had known now would I or known then what I know now So then

Mike Hambright (06:12.748)
Yeah.

Josh (06:16.788)
making some decent money here in Phoenix and then my wife got into school in PA. So we moved out to the Wilkes-Barre Scranton area, Kingston specifically. so lived there, tried being an agent there, but like the market value there is, you know, hundred thousand was the median home value at the time. So like, you know, you sell a hundred thousand dollar house, you get, you know, three grand if you negotiate a three percent commission.

and then the brokers there were still charging 30 percent. So like I’m doing all this work and I’m getting 2100 bucks and my wife’s in school so I’m like man I’m just not making money. And then I met with a girl who’s going to school with my wife, her husband, we all went to dinner and he’s an anesthesiologist.

His wife told my wife, yeah, he likes real estate. And my wife’s like, my husband’s a realtor. They’re going to get along great. And then I’m sure as an investor, you hear from doctors all the time, yeah, I’d love to invest in real estate. And then you present an opportunity and they never do anything. And you’re like, OK, really? And so him and I both had this preconceived notion, great, another agent who doesn’t know anything about investing. I’m like, great, another doctor who’s not going to do anything.

Mike Hambright (07:27.81)
Right.

right?

Josh (07:42.614)
And so then when we met, he’s like, wow, you actually know a lot about property management, you know, and he had, I don’t know, 20 units or 30 units at a time. I’m like, wow, you actually own something other than your house, you know? So we got along really well and together we sent mail. So like, this is kind of where the mail comes full circle. So we initially partnered up like, oh, we’re going to wholesale properties. We sent out one batch, got some calls.

We’re a little too freaked out about it. Didn’t do anything. Well, we’re walking our dogs and we see this property that’s, you know, kind of looks like a motel, but it’s real rough looking. So we’re like, we should send that guy a letter. So, you know, I like become a detective and I find everyone in the area with the same last name. So I sent mail to everyone. His mom.

you know, sisters, brothers, everyone with the last name, I sent him a piece of mail and he called up, hey boys, I see that you’re looking to sell. long story short, we negotiated 99 % seller financing on a 35 unit apartment building. So we put 1 % down, it was $13,500. Eight months later, we had it appraised and it appraised for 2.58 million. So, and that was 2017.

Mike Hambright (09:06.008)
Hmm.

Josh (09:09.172)
So, he called because we sent mail. And we had the knowledge because I had spent whatever, three years learning everything I could about real estate investing, seller financing, negotiating. So when the opportunity came, I was like, this is an opportunity. We gotta jump on it. So then I just started sending mail. Mike, my business partner at the time, he…

I’m like, man, I’m going to start flipping. You know, and he’s a doctor. Oh, it’s too risky. I don’t want to do it. And so he, you know, no, I’m good. So I send out mail and I hit specifically, I had a guy from church who his property was in foreclosure, but it was tax foreclosure. So he owed real estate taxes and he owed like 4,500 or 7,000. It was somewhere around there.

and his property was worth like 80 or 85,000, you know, all day long. And so I’m like, you know, I told him to eventually just negotiate with the county because that’s all they wanted was a payment plan. But I’m like, I wonder if I could get my hands on that list. And so after we did this apartment deal, I got a bunch of cash and I was like, okay, well now I can send a piece of mail or that says like, I pay cash because I felt like

I can’t say that if I can’t actually pay cash. Well, now have some cash. So I send out mail to this delinquent tax list. I got so many good leads and I didn’t even like, I was just blown away because like my first deal that I got, it was 60,000 and I closed on it and I listed it and we got 125 three weeks later cash as is 20. And then like that was the

Mike Hambright (10:38.232)
right?

Mike Hambright (11:01.336)
Yeah.

Josh (11:04.694)
the first day we were on the market or second day we were on the market we got that offer. So I was like, I’m gonna be rich, you know? And then, you know, obviously they get harder after that. But there was two other deals from that first mailer and both of those were 30 grand too. So like between those three deals from that one piece of mail or that one mailer, it was over 100 grand. So, you know.

Mike Hambright (11:10.702)
Yeah.

Mike Hambright (11:28.206)
That’s awesome. So let’s talk about, you go forward several years and you’ve gotten more sophisticated, right? So there’s a lot of, know, certainly a lot of, you were smarter than a lot of newbies, a lot of newbies here, male.

And then they go look for the cheapest lists they can find, which is just usually like agent equity, something really broad, you know, and a lot of the guru type folks push that because it’s just easy to execute. You know, you can go buy those lists from anywhere, but you started digging more and more into kind of niche lists and stacking lists and stuff like that. So talk a little bit about that.

Josh (11:45.845)
Yep.

Josh (12:02.314)
Yeah, so, you know, obviously I was sending that delinquent tax, so I got pretty regular on that. And then I started, know, and for the people who see this, like you can go to your county and you can ask them for a delinquent real estate tax list. And I’ve tried this in probably 20 counties and they all provide it. There’s different processes for them. Like some of them you had to do like a FOIA request, but

It’s accessible to pretty much anyone. Some of them charge a fee, some of them you need the form. So anyways, it’s available to pretty much anyone if you look. So from there, after sending that, I was like, well, I wonder who else might be in a position where they need to sell. So I hired a VA and we started going through the Pratha Notary’s office, like the recorder’s office of people who have pre-foreclosure recorded against them.

And then I even started like on the, I’d have them scan the obituaries weekly, search the person’s name in the county and see if they own property. And then we’d mail to the property because so many times we would have people call us because the property was delinquent. But some of the families, they may not be, but they would be in, you know, foreclosure or they would just be dilapidated and they’ve inherited this property.

Well, the family doesn’t either have the resources. It’s part of an estate. like they don’t want to mingle, know, co mingle funds. And so their best option a lot of times is to just sell the property as is. and so that’s, that’s been a good list too. And I found some better sources for that data now where I don’t have the VA manually pulling them cause it’s so slow. so then, you know,

After the probate stuff, started looking into, obviously we did pre-foreclosure as well, eviction lists. I mean, there’s so many, like right now I’m working on a condemned list, like properties that have been listed as condemned. Because my whole thing is like, you know, if I can send out a thousand letters and get a thousand calls and do a thousand deals, that’s my best thing. And people would never say,

Mike Hambright (14:05.87)
Yeah.

Josh (14:23.828)
mail’s bad. But those numbers aren’t going to happen, obviously. But how close could you get? Could you send a thousand pieces and get a hundred calls and do 10 deals? So the better data you have, the higher your likelihood of success for each piece of mail. And then obviously you can’t just send the mail. So you have to send the mail and then answer the phone is an important one. And then follow up with them.

So yeah, I mean that’s, yeah.

Mike Hambright (14:57.752)
I’ll share a couple things that I know because we work with so many investors. So first off, a lot of real estate investors generate leads, but then they drop the ball with answering the phone in timely fashion. You got to answer live, right? And setting up an appointment right away and not over-screening. And so just a lot of people are just generally lazy. So they tend to not do the, they’re just not very good operators.

And so, then, they’ll blame it on the marketing. the marketing’s not really working. It’s like, well, if you don’t answer your phone, it doesn’t matter if it’s like they’re in the ambulance on the way to die or something like that. Like it doesn’t matter how good the lead is if you don’t handle it properly. And the other thing is, is, know, similar, similar to social media, there’s a lot of vanity metrics out there. So at the end of the day, a lot of people look at cost per lead, which

Josh (15:38.122)
Exactly.

Mike Hambright (15:49.91)
I’m not saying you shouldn’t track it, but I am saying it doesn’t really matter. It’s not the same as ROAS, return on ad spend, where it’s like, I put a dollar in and how many dollars do I get back? Because, you know, everybody classifies a lead differently and leads are not…

all the same quality. So if you can get higher quality leads that convert better and maybe are more profitable because they’re not, everybody and their brother isn’t competing for them so you can get them deeper, like that’s what really matters, right? And so vanity metrics like cost per lead, even cost per contract, like I’m not saying you shouldn’t measure them because they’re leading indicators, but the real indicator of how your channel is doing is ROAS.

Josh (16:29.792)
Yep.

Mike Hambright (16:29.972)
return on ad spend. I put a dollar in, how many dollars do I get back for that because you know we know that inbound leads typically have a profit that’s two to three times higher than outbound leads.

And you know, some of these, I mean, everybody that’s listening to this has gotten a deal that they’ve made 10 grand on and one they’ve made 60 or 80 on. It’s like, what was the difference? It was just a better lead, right? And so if you could find a way to get those better leads, who cares what the cost per lead or other things are? It’s like, how do I get more of those? It’s like, well, you find better data to find more people like that. Yeah.

Josh (16:52.694)
For sure.

Josh (17:01.95)
Exactly. Yeah. Yeah, and I think the point you mentioned too about like not competing against every other Investor like if you have lists that are hard to find You’re eliminating all of the lazy people right there So like I look for those things that are like man this sucks to get this list perfect like that’s that’s where you make the money because You could pull

a list on PropStream, BatchLeads, ListSource, any one of those, everyone can do that. But actually calling the county and being like, hey, I want to buy your delinquent tax list. How many people are going to go through that step? And then they’re like, well, am I even going to make money on this? And then the data you get sucks. So you have to like, I mean, I have this whole process, you like you get the data, you have to like scrub it for the parcel numbers. And then you can actually like,

upload the list back into PropStream and it’ll find those properties based on the parcel number. So then you actually have usable data because for so long it was like the townships weren’t correct and the property wouldn’t have the full address or the right owner’s info. So definitely like had to work for a while to get a process down.

Mike Hambright (18:22.36)
Yeah, and then the next level stuff that we found at Investor Machine by, know, we’ve managed over, we’re well over $50 million in ad spend for investors now. And we have data scientists, like we’ve got, you know, an amazing team of people that are figuring out how to do this better and better is to look at the, it’s not just stacking a list and saying how many lists they’re on. And it’s not even like in some markets, lists are way more powerful and predictable than like more of a predictor that the person’s willing to sell.

Josh (18:48.298)
and

Mike Hambright (18:51.682)
than others. Like in some areas, notice of default is meaningless and in some areas it’s great, right? And so what we do, you know, to take it to a whole other level, we use machine learning and we capture all this data, but we look at at the county level in that county.

Josh (18:58.133)
Yeah.

Mike Hambright (19:09.75)
all of the houses that have sold over the past 90 days to six months and that have sold to investors. So not just sold for cash, but sold to known investors. And what were the data points that that had on that? And then we’re and then we can fine tune like the weightings of those values and then apply it in the future to say, you know, we thought probates were really important, but they’re not that important here. Like Florida, probates aren’t as important because everybody’s old there, you know.

Josh (19:35.338)
Right. Right.

Mike Hambright (19:38.342)
But in some markets, the same data, like we used to say, probates are the most valuable lead and then this is really valuable, like nationwide. And then we realized that we change it at the county level now based on what has happened. Right. And it just took doing this for years to get more sophisticated and, you know, learn what doesn’t work and what works better than the way we used to do it and just keep getting better and better. I mean, it’s entrepreneurs work, right? It’s evolution. You just get better and better and better all the time.

Josh (19:50.358)
Interesting.

Josh (20:06.218)
Yeah, yeah, I mean probate and like for example absentee in Florida is probably worthless You know a lot of people probably have a second home there or whatever but absentee in middle of nowhere, Pennsylvania They’re probably like man this property sucks. I’m getting notices from the township How do I just get rid of this thing? So that’s super valuable knowing that info

Mike Hambright (20:30.786)
Yeah. But you know, the second home, absentee owner is valuable if it’s in conjunction with other data. So it could be back taxes, notice of default. They’re like, it’s a second home. Like, let’s just get rid of that thing. Right. But if it’s just, if it’s just age and equity, know, age and equity and, absentee owner, and that’s it. It doesn’t really matter. There’s a lot of people, like you said, have a house in Florida. They don’t live there full time. They, they’re later in life. So they had some money. So they’ve got a fair bit of equity. but.

Josh (20:36.637)
Absolutely.

Josh (20:48.47)
Yeah.

Mike Hambright (21:01.186)
Then something happens, right? Then they get sick. Then they get mowing leans, then HOA lean, then it’s back taxes and stuff starts to mount up. And there’s a story there, right? This data tells a story of like, Hey, it wasn’t, and let’s be honest, everybody that we bought houses from that is distressed, like they’ve, they’ve gotten more distressed over time. Like, like they didn’t just like wake up one day and they’ve got all this shit going on. Like,

Josh (21:24.98)
Yeah, the situation.

Mike Hambright (21:29.262)
It just like was another nail in the coffin over years and decades that eventually the data said, ding, ding, ding, ding, ding, like this guy’s ready.

Josh (21:37.792)
Yep. Yeah. so finding the person when it’s time is the most important thing. And like, that’s where the list stacking has been huge. And obviously, you know, I’ve signed up for Investor Machine because like, and part of the reason I did was like, building the lists takes so much time and you’re scrubbing the data, you’re making sure people are on your do not mail list, which I’m terrible at.

Mike Hambright (21:42.094)
Yeah.

Josh (22:07.346)
I do it, then like, you know, the, it’ll say drive instead of D R. And so then my like scrub won’t hit it. And so like, you know, so like any, any of those things, like having a team to manage that for you, like it helps you become more of the owner and not the guy in the weeds doing all the things. you know, that was kind of my, my push last year was like, how do I

Mike Hambright (22:16.876)
Right.

Mike Hambright (22:27.139)
Yeah.

Josh (22:37.046)
sit more in the owner role instead of like I’m the director of marketing and I’m the director of sales and dispositions and everything else, know, because you you see the people who are killing it. It’s like they have a system, they have a process and they have people. you know, having having you guys deal with that takes a lot off for sure.

Mike Hambright (22:42.988)
Right?

Mike Hambright (22:57.9)
Yeah, it’s a lot of work. you were one of those guys, because I remember we talked because we were friends even outside of obviously you being a customer of investor machine and, and investor fuel and all that is, you know, you’re one those guys that was already doing a lot of things that are way above what most people are doing. And so a lot of times people like, already do that. I already do what you do. And it’s like, well, I mean, there’s no way you could be as sophisticated as us with data scientists and software that’s doing all this and everything. And I think you just realized like, what I’m doing is right, but it’s a grind, right? You got a, you’re a spreadsheet jockey and you’re in

Josh (23:11.862)
Mm-hmm.

Josh (23:25.259)
Right.

Mike Hambright (23:27.824)
there cutting and pasting stuff and you cut and paste something wrong one time and you’re screwed, you know?

Josh (23:27.83)
Yeah.

100%. Yep. And then the file crashes and then you’re, yeah. mean, yeah. And then like, I’ve even had, I think one time I, I did a sort and I sorted incorrectly. the property addresses and the mailing addresses were all wrong. Like, dude, come on. Or like one time I didn’t have a phone number or I put the wrong phone number. And so people literally were calling. And the only way I know about this is because they submitted a form on my site.

Mike Hambright (23:49.89)
Yeah. Yeah.

Josh (24:03.252)
and they’re like, hey, I tried calling your number, but it didn’t work. So I literally spent like six or seven grand to send mail and they didn’t even have the right phone number. like, you know, not having those mistakes is valuable too.

Mike Hambright (24:12.258)
Wrong phone number, yeah.

Mike Hambright (24:17.804)
Yeah, yeah, awesome man. So what do you think the evolution goes from here for you in terms of, know, high level kind of growing your business next level like from a lead gen perspective I’d say.

Josh (24:30.378)
Yeah, so we’ve been focused on brand building. we are probably, if not the top, we’re probably up there in the counties that we invest. So I’m kind of making the push to be more of a household name. So we’ve been running billboard ads, we’ve been running some TV ads. We went heavy on TV last year, but the ROAS wasn’t good. It was like 50%.

So that’s not ideal. And then the billboards and the TV that I’m running now is so affordable that it’s just an add-on. And I also think it helps because my acquisition team will say, so did you hear about us on TV or did you see a billboard? Boom, credibility. Because not everyone can do the TV and not everyone can be on the billboard. So that’s been a big push. And actually, one of my focuses this year is

Mike Hambright (25:17.838)
Yeah.

Josh (25:28.758)
spending less money on mail. And it goes back to what we’ve talked about is like the best lists, the best pieces of mail, followed up correctly. Like if my acquisition managers are inundated with crappy phone calls, it’s not gonna be beneficial to them. They’re gonna be like, we just keep getting DNCs and we keep getting angry people and people that don’t wanna sell and I’m wasting my time following up. So sending less mail to

Mike Hambright (25:54.37)
Right.

Josh (25:58.134)
better lists has been the focus and I started with you guys in October and Q4 of 2024 was by and far my best quarter ever. We did 478,000 so stellar numbers. We have some flips that between three flips we have right now should be 250 grand in profit.

Mike Hambright (26:11.34)
That’s awesome.

Mike Hambright (26:17.697)
Yeah.

Mike Hambright (26:26.082)
That’s amazing.

Josh (26:27.03)
We’re nailing it, man. Like, it’s good stuff.

Mike Hambright (26:28.974)
You know, one of things we do is a lot of people don’t realize this with investor machine. This isn’t intended to be a whole show about investor machine, but I’m excited about it because of what it does. Like we tell sometimes people to back off on your budget, like you’re spending too much. And so we stat, you know, we ultimately create a stacked list of the person very most likely to sell the whole County to the last person that they’re never selling to you. Right. And it’s usually up to the investor how deep they want to go on the list. let’s think about this. Most investors set their budget based on

Josh (26:36.778)
Yeah.

Josh (26:47.199)
Okay.

Mike Hambright (26:59.15)
some number they just pulled out of the air. They’re like, yeah, I’m gonna spend eight grand a month on mail. It’s like, well, why? So we analyze like how deep you should go into the list of where the point of diminishing returns is, and you should stop here. And we can also tell people that are spending like four or five, six. It’s like, look, had you been spending 10, you know, these are 10 other houses that sold, but if you would have been marketing, you know, if you, if you doubled your budget, there’s 10 houses that sold to investors and you would have been hitting, we would have been hitting them on your behalf.

Josh (27:01.192)
Okay. Right. Right.

Josh (27:09.941)
Yeah.

Josh (27:23.252)
Right.

Mike Hambright (27:29.176)
but it goes not to raise your budget. And so they’re like, wow, there’s, you know, there’s activity. So I don’t know anybody else doing that. There’s like visibility to like optimizing your marketing spend based on actual sales that are occurring and how deep in the list they are, you know.

Josh (27:41.312)
Yeah, and I mean, the cool thing with direct mail is it’s like pretty instant. Like you send a piece of mail and it’s like for the next three weeks, you’re getting calls, you know? like, you know, obviously there’s holidays and things that will affect those numbers, but like, you know pretty quickly if that mail is working or not. So it’s like, double it for a month or two. And if it’s not working or you’re not getting that return, then cut it.

you know, like, but historically it works and that’s why, you know, the top guys that I know all still send direct mail. They’re all killing it with it. So, you know, it works.

Mike Hambright (28:24.716)
Yep, yeah, it’s tried and true for sure. And it doesn’t have all the pressure of texting and cold calling and a lot of the other channels that are getting beat up pretty bad right now.

Josh (28:34.986)
That, yeah, that stuff scares me, man. mean, if people got the guts to do it by all means, but like we, we stopped doing it like first quarter of last year, cause it was like, I just don’t want the, I don’t want the stress of potential litigators and yeah.

Mike Hambright (28:52.246)
Yeah, you got enough issues to worry about. Cool, buddy. Well, hey, thanks for joining me on the show today. Good stuff, looking forward to seeing you soon, and everybody, we’ll see you on the next episode. Have a great day.

Josh (28:56.214)
100%.

Absolutely, man. Thank you so much for your time.

Josh (29:05.024)
Bye,