Today, we are joined by Steven Nguyen to talk about using direct mail. In five years he has scaled from zero to 90 units. While working a full-time job as a pharmacy director, and he's done it completely without partners and on his own.
[00:01 - 10:11] How to Scale a Direct Mail Campaign
- Stephen has been working as a pharmacy director for 10 years and has recently started scaling into real estate
- His strategy for scaling is to buy properties in areas where the rents are low and then value add them
- How Steven spends $3,000 a month on 300 handwritten letters to target mom and pop owners with deals underpriced by going direct to owner
[10:12 - 20:24] How Real Estate Investor Uses Outsourcing to Manage Large Portfolio
- He emphasizes the importance of delegating and trusting others, and views time as a precious commodity
- He shares that one of his goals is to scale his real estate portfolio to 300 units or more
- He uses Prop Stream to find a list of qualified candidates, and then sends personalized letters to those candidates
[20:25 - 19:37] Starting Multifamily Course
- He shares how he created a course called Making Multifamily Money
- He teaches people how to acquire multifamily properties using his Making Multifamily Money course
- Steven emphasizes the importance of asking questions during negotiations and stresses the importance of trust
[19:38 - 20:36] Closing Segment
- Reach out to Steven!
- Links Below
- Final Words
Tweetable Quotes
"The more cash you get, the more you force the appreciation. So it's more in your control" - Steven Nguyen
"You have to be able to delegate and leverage other people and have trust in people." - Steven Nguyen
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Connect with Steven! Follow Steven Nguyen on Instagram. Youtube: https://www.youtube.com/@stevendnguyen. Tiktok: https://www.tiktok.com/@makingmultifamilymoney
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Want to read the full show notes of the episode? Check it out below:
[00:00:00] Steven Nguyen: Typically I send about 300 letters a month. I have about 3% response rate. So about maybe nine to 10 people will call me and add that 10, maybe one to two might be serious. So it's really a numbers game. And then on top of that it compounds cause sometimes people will call me to this day for letters I sent out almost a year and a half ago. Cause they throw it in a dresser and all of a sudden they find it. So, you know, because of that. You know, I shared my journey about direct mail campaigns and it almost came to the point where people were asking me, Hey, Steven, can you just do it for. So now I kind of do offer that service where I will do a direct mail campaign for people, and all they have to do is just pick up their phone.
[00:00:50] Sam Wilson: Stephen Nguyen has scaled from zero to 90 units in five. While working a full-time job as a pharmacy director, and he's done it completely without partners and on his own. Steven, welcome to the show.
[00:01:02] Steven Nguyen: Hey Sam. Happy to be on and to share my journey.
[00:01:05] Sam Wilson: Absolutely. Steven, I'm looking forward to this. There are three questions I ask every guest who comes in the show, and 90 seconds or less, can you tell me where did you start? Where are you now, and how did you get there?
[00:01:13] Steven Nguyen: So apparently I've been working full-time as a pharmacy director for about 10 years. When I graduated, I made two 50,000. I had two $50,000 of student debt. So out the gate I decided, wow, I'm two $50,000 in debt. Grinded for four or five years to pay off that student loan, which was humongous. But after I paid that off, I said, well, what's next? Right? I just paid off this massive student debt. So the natural progression was to start a single Family Oaks. So that's exactly what I did. I recently caught house hacking, so I bought a house with 10%. Lived in the master bedroom and I rented out the three other bedrooms that were vacant. So that was $3,000 a month. And from there, that covered my mortgage. So I just had to cover my property tax, insurance and utilities. So I was living for $1,500 a month in California, which is pretty good, uh, especially in like San Francisco area. And my goal was to do this one single family home a year for 10 years. And after year three, I quickly realized that this was not sustainable. In California, you don't cash. It's purely appreciation. You're lucky to break even despite self-managing. So once again, that was another sticking point. How do I scale from here and make more cash flow? That's when I learned about, uh, apartment complexes and started direct mentally campaign. So I sent out a bunch of letters to Oklahoma City, about 1800 letters, 300 a month for six months. From that direct mail campaign, I got my two first apartment complexes. I got a 26 unit in Oklahoma City and a 20 unit in Oklahoma within about six months of sending these letters out, and it just completely blew my mind. The moment I learned that apartments were based on the NOI divide by the market cap rate. Versus single family, it's based on the sales. Comparable, right? Or single family. It doesn't matter how much rent you get, you can get one single family. You can get 10,000. The one next door can get 5,000. They're both the same. But apartment complexes, the more income you have, you forced the appreciation, right? So you have cash flow, air appreciation. And once I learned that I, my mind was blown. I just said, you know what? I need to go to the apartments. And what was crazy was in Oklahoma, The apartment was $5,000 for my 26 unit and 350,000 for my 20 unit, and that's cheaper than a condo in California. Like literally a condo in California costs more of that. My single family homes were close to a million each, and I just said, wow. I gain more cash flow, it's cheaper, and after I do my value add strategy, I can double or triple the value by doubling or tripling the ribbon. So that's when I started to scale massively during Covid. So that started during 2021 when it was a hot real estate market. But because I did a direct billing campaign, I was able to get these deals off market and work as a directive owner and negotiate. And then from there it led me down the rabbit hole mobile home parks, where I basically started sending letters out to mobile home park owners and, and same thing, I was able to get a 200 lot mobile home park in Alabama. About 40, uh, lots occupied, 160 lots, uh, vacant. And you know, same thing I got for a million dollars or 1.1 and I was able to negotiate seller financing cuz the owner owned it free and clear. And I was able to build that trust and leverage my skills as a pharmacist. So I know that's pretty fast there, but that's kind of how I, I scaled from zero to 90 units in, in five years, starting off in single family home. And honestly in the past year and a. Um, that's when I bought, you know, my two apartment complexes and a mobile home part. So all my success was pretty recent, I'd say.
[00:04:44] Sam Wilson: That's awesome growth though. I mean, in a very short period of time. And especially being able to do it on your own, you know, without partners, that's that. There's a lot of moving pieces there. Direct mail gets a bad rap. Yeah. You know, it takes a lot of time to manage it. It takes a lot of money to send out the mail. Tell me about, I mean, just how you built the list. I mean, that in of itself is a bit of a feat in going, okay, how do we narrow this down into the most qualified candidates for whatever it is you're trying to acquire? Talk to us about the process.
[00:05:17] Steven Nguyen: Yeah, so for my direct mailing list, I use Prop Stream and there's a lot of, uh, multifamily criteria that you can use. Mm-hmm. You know, kind of off the top of my head, you can click on like commercial real estate multifamily, a hundred plus units, multifamily, five plus units, Garda style apartment. There's about 10 criteria points that I use, but the key is you want to find a sample listing on LoopNet and then put it into Prop Stream and see how they classify. Because sometimes each county and each state classifies it differently. And you know, I will say it's kind of an art, like no matter what list you get, there'll always be some inaccuracies. Like even when I sent my letters out, sometimes you have owners calling you duplexes, triplexes, fourplexes, as well as retail strip centers. That's just the nature of the beast. But you know, that's what my first step was the criteria but what kinda led me to my most success is making a very personalized letter. So my strategy's a bit different. I don't use a postcard. I actually send two envelopes, it's invitation size. So it's almost like a thank you card from a friend or family member. Right? And you know the name address is handwritten on the backside. Um, I put my address, and that's where I use my title. So I'm technically a doctor. I used Dr. Steven Dwin. You know, pharmacists are doctors. Not many people know that, right? Um, and then from there they opened up my letter. And in my letter I just kind of talk about myself. I don't come off as a big syndicator, a big corporation. I just said, Hey, I'm Steven, I'm a pharmacist. Been working for 10 years. I own X amount of real estate units and I'm just looking to buy some more real estate so I can provide for my family in the future. You know, just come a very casual, very low key, very humble, right? You know, I have this humbleness by scaling a 90 unit. I try to stay humble. Um, you know, my girlfriend helps me with that they always do. And. From there, you know, basically I just write, Hey, you know, I wanna buy, make an offer for your partner complex. I make it easy, simple, you know, the typical letters that come out there. Oh, and then, but the difference, what I do is I have, you know, hand write my name and signature and I write a call to action and written. So I'll write, Hey Sam, call me. This is my phone number. So, you know, this is kinda the strategy that I've honed by doing multiple direct mailing campaign. And typically I send about 300 letters a month. I have about 3% response rate. So about maybe nine to 10 people will call me and add that 10, maybe one to two might be serious. So it's really a numbers game. And then on top of that it compounds cuz sometimes people will call me to this day for letters I send out almost a year and a half ago. Wow. Cause they throw it in a dresser and all of a sudden they find it. So, you know, because. You know, I shared my journey about direct mail campaign and it almost came to the point where people were asking me, Hey Steven, can you just do it for me? So now I kind of do offer that service where I will do a direct mail campaign for people, and all they have to do is just pick up their phone. Respond to their texts, respond to an email. Cuz I know a lot of people are busy. Yeah, they have kids, families, elderly parents to take care of. But for me, I don't have that yet. So I'm just trying to help people out and get their first deal. Cause some of the deals that I bought were just insanely underpriced, by going direct to owner for sure.
[00:08:38] Sam Wilson: What is the process of handwriting each of those, I mean, that's a mind numbing process to write 300 handwritten letters especially if you're doing it for other people, how do you scale that?
[00:08:54] Steven Nguyen: So I actually tried my first myself. It took me eight hours to prepare 300 letters, but I actually outsourced my letters to a company, called Yell Letters Complete. Okay. And they will actually do the handwritten handwriting for you. So they'll hand write the address, they'll hand sign my name, and then they'll also hand write that call to action and also prepare the. Um, and the way I tell them to do it. So because of that, I'm able to kind of leverage a direct mailing campaign and then free myself at a time. Right? So, you know, it, it's, people can use that company as well, but even on top of that, some people feel it's overwhelming to like, send a list from Prop Stream as well as your letter template for them. Despite me teaching it, that's why people start reaching out to me, despite me, like basically telling people A through Z how to do a direct mailing campaign. They just still, it sounds very intimidating and it has a bad rap. As you mentioned, most people like to text an email. That's kinda the modern day. Yep. But because of that, direct mail is more effective, especially if you're trying to target a more, you know, mom and pop owner, which I do. Right. So it's highly effective for mom and pop owners. You know, I spent about $3,000 for my direct mailing. 1800 letters and that made me $300,000 equity day one, just my two apartment complexes. Wow. To be honest, that's a hundred x return on my money. Anyone will take that.
[00:10:08] Sam Wilson: I like those return profiles. That's not bad. So tell me, you spent $3,000 a month. that was 300 letters a month times six months. Yeah. And so then, so then you're basically at, what is that, a buck 50, A buck 75 a letter, roughly?
[00:10:27] Steven Nguyen: Yeah, it's about a dollar 50 a letter and prop is about a hundred bucks a month. So you know it's about 500 bucks a month, uh, to do your direct mailing campaign. And like I said, yeah.
[00:10:38] Sam Wilson: For a very targeted list. I mean, you know, I go back to, I mean, all the, all the, all the stuff I get in the mail, you know, for our house here, it's like right where I live, like, Hey, I'll buy your house. I'll buy, which, you know, there was a time in my real estate career when I did that too, and most of it's just the same thing over and over and over. I'm like, there is no differentiator between the one letter. You put it in the letter and you put it in an envelope, but it's still some, you know, pre-print. You know, we buy houses and then there's postcards. That's just all that stuff. Of course for me, I'm not looking to sell my house, but so I just throw it away. Mm-hmm. But I mean, I think that's why direct mail gets a bad rap, cuz it's all washrooms repeat the same product coming to the potential seller. And you found a unique way, unique way to scale that. How did you build, I know you said you used Prop Stream to build the list. What gave you, what gave you the idea? You know, pivoting and going after mobile home parks, especially, I mean, there's, it, it's a big country. How did Alabama and say, you know what, I'm gonna put this one in Alabama, one of my 300 potentials on the list.
[00:11:46] Steven Nguyen: Yeah. You know, for me, I was really focusing on the southeast, you know, kind of like more cash flow markets cuz I own single family homes in California. But I just wanted more cash flow. If you buy up apartments, the more cash you get, the more you force the appreciation. So it's more in your control. Like Oklahoma, if you buy a single family home, that thing only goes up 3% a year. At best. It's a steady Eddie market at best, but if I can, yeah, at best. Right. But, so I call it an unsexy market, but because of that, it's less competition. So I focus on small apartment complexes between five to 50 units and it's usually a mom and pop owner. And like I said, if I can get an apartment, my, my 26 unit, I got for half a million dollars. I negotiate $60,000 of seller repair credit during the hottest real estate market, and they appraise at seven 50,000 a day one. So that's $300,000 right there by me sending out a letter. And on top of that, the owner hasn't raised rents in five years, so I'm renovating all the units, eight to $10,000 per unit. New kitchen, new flooring, new paint, everything brand new, and I can effectively double the rent from. Three 50 to 700 and I've done that already. So my unit, so now my NOI has increased significantly. I think it'll be worth around 1.3 to 1.5 million due cash out re. At that point, you know, you pull all your down payment, all your renovation costs, plus extra money, and then you can buy another apartment complex. Right? So to me, that's why I started targeting that market. But what kind of led me to mobile home parks, honestly, like any real estate investor has shiny object syndrome. Um, you know, honestly, I am actually listing it for sale ironically. But for me, what I really liked about mobile home parks is it's affordable housing. Yeah. Like in my mind I just said, where could I. 50 acres of land, 200 lot mobile home park for $1.1 million. That's $6,000 per lot. It costs 20 to $30,000 just to build one lot in a mobile hom park. So if I, so I bought it, I knew I was buying it, right, and I was the type to, I kinda jump out the airplane first and figure my parachute on the way down. So I kinda did the same with my mobile home park where I started consuming a lot of podcasts. But I just kind of knew that like at some high level numbers, It was around maybe 30 units or 30 units occupied when I got it. If you can get, and I got for a million dollars, if you get to half, so that's a hundred unit lots filled, it's gonna be worth about 6 million. If it's all filled at 200, that's gonna be worth closer to 10 million. Wow. So I just said, I think I just need to get this park to a certain level, so I got to around 40-50. At that point, I think I can sell it for double. So now I'm engaging, you know, larger operators who can actually infill 160 lots and have a team infrastructure to do it. For me, I feel like I brought it as far as I could as just a single operator, and I just realized my limitation that in order to bring in like three to five homes per month and sell it or rent it out, you need boots on the ground. Like you need to be there with a. I think I just don't have the infrastructure, but maybe large syndicators do. Cause they usually have like regional managers and build teams that are built out. So they have the economies of skill and I feel like I don't have that currently. So, you know, for the right price, I'm willing to sell and then hopefully take that and scale my apartment portfolio of Oklahoma City. Cuz I have a really strong property manager, Oklahoma City. That's why I chose Oklahoma City and I know that I can easily scale. 200, 300 units easily and not even be stressed and still work full time. Right. Versus my mobile home park is taking about 80% of my time and energy and money right now, to be honest. So it was just kind of a lesson I learned, but I don't regret it. I mean, I learned quite a bit and in the future when I wanna do mobile home parks again, I know how to do it successfully.
[00:15:32] Sam Wilson: Right. That's really cool, Steven. I love that. And I love, I love the use of direct mail you've given, really the secret sauce. Thanks for breaking that down here. Yeah. On, on the show today. Talk to me. You have 40 pharmacists, you know, that work for you currently. I think at the hospital it's a lot of people to manage and, and like you said earlier, you know, time is your most precious asset and you're kind of, that's, it's not something you. You can't create more of it. Yes. Talk to me about outsourcing and leveraging and how you've effectively done that with your portfolio.
[00:16:06] Steven Nguyen: Yeah. So, and as you alluded to, I manage about 40 pharmacists and, you know, pharmacists were very detail oriented and, and borderline oc d. That just comes with the profession. And a lot of people have a hard time delegating, but to me, you know, when you're running such a large hospital operation and running a large real estate portfolio, which translate, you have to be to delegate and leverage other people and have trust in people. If they can do something 70 to 80% as good as you, it's time to delegate it out. Right? And you gotta view your time on a per hour basis, right? Is it worth my time to do a letter, which costs me a dollar 52? You know, per letter, and it takes me eight hours to do it. I'm actually better off working at a pharmacy chef, for example, and I'll make more money and it'll cover that direct mailing campaign. But, you know, for me, um, the first person was finding my who, so they said, why do I choose Oklahoma City? The only reason I say is because I had a strong property manager there. Plain and simple. Nine outta 10 property managers are terrible, unfortunately, and it takes about three to six. to determine if they're good or not. You know, I have a very extensive interview process, and despite that, it's hit or miss. Mm-hmm. , it's almost like the NFL draft in the first round. It's, it's hit or miss. Right. And. So because of that, I, I built a system where I have multiple, I, I have my main property manager. I have two backups in case my first one does not perform, and I just go down my list, right? First one doesn't perform, I engage my second one, second one doesn't perform. I engage my third one. And you just go down. It's the same thing in the workforce, right? Like if you hire someone, they don't perform, what are you gonna do? You're, you're gonna give them warnings and then eventually bringing someone to replace them, right? Slowly, right? So it's the same, it's very translatable from a W2 to pharmacy. Then also, so number one, my property manager, right? So they take care of my renovation for me as well. So they typically serve as my property manager and my general contractor. If they don't do both, they can usually refer you to a general contractor that they use, right? So at that point, you're using your referrals, and then you do interview them to see if they fit your vision. So from there, if they do that, then you know, you try 'em out. But like you said, unfortunately, you don't know until you use them. Like everyone talks a great. When you're trying to give 'em a job or give them money, right? Whether that's property manager or con. So you just use it and then you test them and say, Hey, you know, I know I'm a small fish. I only own 26 units and you're gonna renovate it. But if you help me successfully renovate this and raise the income, I'm gonna buy more. And guess who's gonna manage the next one? Right? It's gonna be you and now I'll own two. After the same thing, raise the rents, cash out, refi. Now I own four. You know, so that's how you get that slow, slow compounding. So you just make it known that you wanna scale alongside with them. And also, you know, just be easy to work with. Like, this is a skill that I learned, you know, a lot of investors and business owners, unfortunately not easy to work with, but I try to be the easiest person to work with so that when they have a another owner that wants to sell, who do you think they bring the deal to? First, it's always, because they love working with me. I, I always say, well, what would you do? Like, how would you renovate this unit? You tell me, I'm, I'm in California, you're in Oklahoma City. You tell me how to renovate my apartment so that I can spend the least, like get the most rent while still looking very nice and very practical. Right. Right. So it's just, and then people feel appreciated when you do that for them. Cause a lot of people will come in and say, Hey, I want, you know, whatever, laminate flooring, granite countertops, but that might work in California, but Oklahoma, they don't, they don't need it. Right. Right. So, I, I. Trust and leverage your skills and experience and, and just know they may mess up. But as long as you learn and pivot for the next time, that's all that matters. So I, I just always kind of had that mindset where, you know, I'm able to leverage and, and same thing like with my direct mailing campaign, you know, I outsource that all. The only thing I have to do is pull up the data from Prop Stream, you know, send it over to the company that does it for me. I already have a copy and paste template that they have, and they've done something in my letters. They know exactly what I'm. So at that point, you know, it's pretty automated and if I wanna take it to the next level, I can hire a virtual assistant and, and they can do it for me too. But, you know, I'm not, not quite there yet, So, uh, but there's just ways to outsource yourself outta the job. Cause at the end of the day, you know, I buy a real estate to have time freedom and options, but if I'm bogged down with this like massive real estate portfolio that I'm managing myself, that that sounds miserable to me. For sure. For sure. So that's why like to outsource.
[00:20:24] Sam Wilson: Yeah. I love where you said that.There's a great book on who, not how, which is, you know, that's music to my ears certainly. And I think I also like that the point there when you say, what would you do? Right? It's, I think that's really cool because putting, letting them do the thinking for you, and also probably they're gonna tell you things that you wouldn't have thought through. It's not that you're lazy, but it's, it's, it's just like, Hey, what would you do? How, how, how would you solve this problem? As opposed to you being the one that always have to think it through. Use your mental, your cognitive bandwidth, which is limited across this many properties, running a pharmacy, running the hospital, or the director of a pharmacy to the hospital. You've got a lot of things to think about. Let other people use their expertise and tell you what they do. I think that's really awesome. Last, uh, last question for you. One of the things that you have built in this process, Is a, what did you call it? I think we talked about this before we kicked the show off. Not your direct mail service, but you built a course, I think, around acquiring multifamily properties.
[00:21:21] Steven Nguyen: Yeah, yeah. No thanks for that. So I created, it's called Making Multifamily Money. It's basically a course that has 120 modules and it basically just shares my journey and my experience about how I closed on an apartment complex from A through Z. Like I said, I literally did everything by myself from A through Z, right? So I created, I chose my market. I chose my property manager, I chose my direct mailing campaign. I chose my criteria for that. I create a system and a process, uh, to basically acquire off market apartment complexes that typically you negotiate directly with the owner. So I teach everything from A through Z, like how to pick a general contract, how to pick your insurance, how to manage a property manager, how to select your property manager. It's literally a through Z system. Just sharing my experiences and I felt I made a lot of mistakes throughout the past, like two, three years. Like, I'll be honest, I, I've. A hundred thousand dollars mistakes. But I hope to kind of condense that into a quick course for people to kinda learn and, and not make the same mistakes for me. Right. Because like me, I wish I had that opportunity where I could have paid money to basically learn and not make these hundred thousand dollars mistakes. Right. So, you know, that was kind of my intent and. It was funny, it just kind of started as me wanting to create it, uh, to provide to like my, my future kids one day. But whenever that happens I just say, Hey, you know what, let me just try to bring it out there and see if other people wanna learn. Cause like you said, some people just wanna know it's possible to scale large real estate portfolio that's 90 units plus while working full time. You know, most of the people in my position, you know, they're typically syndicators. That's their full time job. And so I just wanna kind share my story and, and kind of create that into educational content. You know, it's come, comes very natural for me. You know, I work at an academic hospital, so we teach a lot of pharmacy students, so it just came very organic to me. And I just kind of want to do that as well. And I kind of take the educational approach when, you know, talking with owners, honestly, like a lot of. You know, we start negotiating about price, it gets very tense. Sure. I'll just say like, Hey, can you educate me? You know, I'm here in California, you're the person that lives in Oklahoma City, like, what's a good price for this apartment complex? I literally ask that question like, what's a good price? And a lot of 'em are pretty surprised. A lot of 'em will just say, Hey, you make me an offer. Or they'll, or sometimes they'll gimme a price and one guy came and said, Hey, I want the task says, For the property. And I know out the gate if the tax and price is under market value. Right. Already Inly. Yeah. Yeah. So , so it's just asking that question. It builds that trust, but also it helps you learn because sometimes if I came at like, Hey, I wanna give you 600,000, but maybe they're okay with half a million, right? By me just asking the question, I saved a hundred thousand dollars. Like right now.Valuable questions, Yeah. That's the value questions. Right? And you know, like for me, I'm not, you know, I know what to do. So it's really the power of questions. That's funny. I can write a book about that
[00:24:17] Sam Wilson: There you go, Steven. We'll look for that here in the next year after you get done, uh, you know, selling off your mobile home parks and everything else, the power of questions. Here's your, here's your title. You got your next project right there in front of you. Steven, thank you for taking the time to come on the show today. This was a blast learning about everything that you've done. Uh, I won't rehash it all here, but it's pretty cool. So I'm just glad to have you on the show today. Thanks for being so direct and. With us about your processes and just kind of how you do it. So that's been, that's been really refreshing and, and nice to hear. If our listeners wanna get in touch with you, learn more about your course and or your direct mail service, what is the best way to do that?
[00:24:53] Steven Nguyen: Yeah, so you can reach out to me at Steven Nguyen on YouTube and at making multifamily money on TikTok and Instagram. And once you find my social media, it has a link to my course. Um, it's published on Teachable and it's. Making multifamily money. And from there you can have access to my course, you can have access to my, uh, direct mailing campaign service. So there's three plans. There's bronze, silver, and gold. The bronze is just the course, the silver. I'll do six months of letters for you and the gold is I'll do 12 months letters for you. Cool. If it typically takes about six to 12 months to have that success, right. Of the direct mailing campaign.
[00:25:31] Sam Wilson: Yep. Absolutely. Steven, thank you so much. I certainly appreciate it. Have a great rest of your day.
[00:25:37] Steven Nguyen: You too, Sam. Happy to share my journey and thank you for everything.
