Driving For Dollars With David Lecko

Episode 443: Driving For Dollars With David Lecko

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REIS 443 | Driving For Dollars


Some of the successful products out there come from someone’s attempt to solve a problem for themselves. This is how the software DealMachine was born. Struggling to get his first rental property, David Lecko started DealMachine that later on became the app for investors with the same struggles. In this episode, he joins host Mitch Stephen to tell us more about it. They also talk about how driving for dollars can change your world and how DealMachine has changed inside. Plus, David and Mitch also share some tips on finding that first property, preparing a budget, automating processes, and so much more!

We’re going to be talking with DealMachine. We’ll be talking about how driving for dollars can change your world and how DealMachine has changed inside itself. It’s always growing, always improving. I’m here with Dave Lecko. We met a long time ago. I did some episodes with driving for dollars and featuring DealMachine. It’s popular. It works well and a lot of people use it. I hear about it all the time from my students and from people. We’re going to talk about some of the changes, but maybe we need to start from the beginning. There are some people out there that maybe they’re hearing about your program for the first time. Give us a recap of David Lecko and DealMachine.

That takes me back to 2016. I’d read Rich Dad Poor Dad. I was interested in having a rental property because that was more predictable than the stock market. That’s what I learned from playing the Cashflow game if you’ve ever played that. It was helpful for starting my journey. I went out and I looked for properties for sale, but none of them would meet my cashflow numbers. The things that were listed were priced too high based on what they could rent for. It wouldn’t make a good rental property. I went to a real estate club here in town and they talked about I need to drive for dollars. I did that, but I struggled so much with the follow-up process. I had a list of 40 properties. I’ve written the mailers and sent them out. I took a weekend and I made this basic version of an app that would look up the property owner and send out mail. That way, no houses would get bought out from under me because I hadn’t sent out my mail or hadn’t got in contact with the owner.

You’re acting as fast as you possibly could. If you didn’t get the house, it wasn’t your fault.

I started using that myself and a few friends wanted to use it too. The easiest way to get it on their phone was to put it on the App Store. People were already searching for driving for dollars. The DealMachine app started coming up, so people started to download that. It took off into a whole business that I didn’t anticipate. I was trying to make a tool for myself so that I could get my first rental property. That was a few years ago. We met not too long after that in early 2017. We had a good time. You invited us to Cancun on your investor trips. We got exposure to a lot more serious investors too and realized this could be used to scale, not just for a single person who’s trying to get into real estate, but that was the start of my journey.

A good friend of mine, God rest his soul, Ken D’Angelo, who started HomeVestors, said to me once that an entrepreneur rarely ends up with the business that he originally set out to start. That it always ends up morphing and evolving into the path of least resistance for the most money. I find that too in my life. You said you didn’t plan to do this. What I loved about your program, which separated you from everybody that I knew at the time, and tells me if it’s still that way. You could take a picture of the house and that would be the postcard that’s going to go out to the owner. The owner would know that you’d seen his house because he’s going to get a postcard with a picture of his house there. What I liked even better was if you took a selfie of yourself with their house in the background. They not only knew that you’d been to the house, but they knew that you were talking about their house and you were specific. You had been to the house because you’re standing in front of it at the time that the picture was taken.

I imagined myself on a Friday night, I come in from the bowling alley or wherever. It’s 11:30 and I’m sitting down, going to have a snack or something, and there are all these postcards on the table. The one I’m definitely going to look at is the one that has a picture of my house in it. I don’t care if there are 100 of them. If I can see the one with my picture of my house on it, I’m picking that one up. I thought that was a great separator. When I had postcards, everyone always puts one phone number on their postcards. I would always put two phone numbers. I’d put one directly to a live person like me because I wanted to buy the house. I always put like a free recording and I’d put a LiveComm number on there. He’s not going to call your number at 11:00 at night, but he might call for a free recording and look for information. We’re going to capture his phone number if he calls from a cell phone. That’s your little chance to connect with them. I bought a lot of houses driving for dollars, hundreds of houses. Are you in the house business yourself?

The whole reason I got into it was to get that rental property, Mitch. I did that. I’m closing on my ninth property.

I know this took a lot of your time because if anyone out there has ever tried to invent or create a software or an app, it’s a continual process for a while. In the beginning, you have your glitches. I had the glitches with LiveComm. I know you had your glitches with DealMachine. There’s no way that you couldn’t have. You’ve got to keep working through the support desk until you get it all right. It takes a long time. It’s a huge effort. One of the reasons I bring that up is the only reason you invented it was because it wasn’t invented. There are similar things on the market, but they wanted too much. I couldn’t afford to use it as often as I wanted to use it and pay that price. I went and built it myself. That was a big eye-opener. I get a paycheck from people using LiveComm and I get to use it as much as I want. It’s the same thing with you and DealMachine. I don’t imagine you have a subscription fee.

I give myself a free subscription. That’s a perk.

Tell us some success stories that you’ve heard out there.

Amazing things happen by getting out in the streets. Share on X

There are a lot of success stories of people doing their first deal, but I wanted to highlight some of the ones where they’ve made a killing within a year or six months. I’ll talk about somebody who’s in between that, TJ Russo up in Seattle, which is a market that people frequently say, “Is this market too saturated? Is this price point too high for me to go ahead and do real estate investing?” He’s doing wholesaling in Seattle. He made $125,000 on four different deals within his first six months of using DealMachine. Those were four deals. The average is about $30,000-ish each. That’s a high wholesaling fee compared to what we would see here in Indianapolis, which is probably about $7,000. The houses are more expensive. You can get a higher wholesaling fee. He also did some more legwork to get those deals. Here you might need 200 distressed properties. In Seattle, he had about 400 distressed properties added to his account that he was reaching out to in order to get each one of those deals.

The idea of automating was a great idea and it’s a simple idea to think about, but when you start to automate your business, it’s not as easy as you think. You have to find the right people and processes and they have to mesh together. You’re constantly changing and morphing until you find the right balance of everything. You’ll have a lot of tools. People ask me, “How is the best way to find houses?” The first thing I’ve got to ask is what your budget is. When you’re starting out with zero, when you’re walking around, grabbing old political signs, flipping them over, and writing on them because you don’t have a penny to your name, there’s a certain number of things you can do. As you get a budget, as you strike gold a couple of times, when you get a house or two, you can start forming a budget. You can then start taking some of the onus off yourself and systematizing the processes of finding, funding, and selling houses. When you first get your app, if someone first signs up with you, what do they do from the beginning? Give me some steps.

You’ve got to remember why you’re doing this and that’s going to carry you through some of the work that needs to be done. DealMachine makes it easier, but it doesn’t remove all the work necessary to get an extra $1,000 a month in your kid’s college fund. Remember the reason why you’re doing this. When you’re using DealMachine, you need to go out and look for properties that look physically rundown. You’re looking for the worst houses in whatever neighborhood you’re in. If you’re in a nice neighborhood, you want to add a house that’s got bushes that haven’t been trimmed. If you’re in a C or D neighborhood, you need to be looking for the houses that don’t have a wall or they’ve got a hole in the roof. Keep it in context to whatever neighborhood you’re in and add those houses that look like they’re the worst for whatever neighborhood you’re looking in.

I found that I can hire a person for about $120 for the day and they could start at 8:00. They can drive for four hours. They could take an hour for lunch, which I didn’t pay them for it. They could drive another four hours. Get in an eight-hour day in my hometown of San Antonio. They could get about between 90 and 115 houses that I didn’t know about, vacant, abandoned, or houses that need attention. They could add to my list of about 100. It was about $1 a house more or less. When I say $120, $130, I’ve also given them $20 for gas for the day. What’s included in that. I have the whole thing automated. I would have people. I would tell them what neighborhoods and zip codes I wanted them to drive. I would take pictures of it. It was a great way to track them. I could know where they went and I could see what they were doing.

You can buy lists of vacant houses. I’ve had people say, “Why would you do that when you buy a list of vacant houses?” I said, “That list is not current and everybody has that list. I need the one that got moved out of yesterday. No, it’s not. I need to get there first before everyone else. I need to know about it before the whole world before it even gets on that list.” That’s how you do it is by getting out in the streets. I’ve been in my office doing whatever it is I’m trying to do from my office. I found ways to stay in my office for weeks at a time, but I get out of my car one time to check on rehab and I buy the house across the street. You make your money in the streets. I was trying to buy houses in all different directions. It always amazes me that when I’m not even focusing on the art of trying to buy a house, I get out in the street and someone walks across the street or someone tells me something and I’m buying a house all of a sudden. I didn’t even plan to do that on that day.

A question along those lines that I often get is what if somebody sees me taking a picture of their house? They get scared. People who have not done this before, they’ll ask me like, “What do I do if somebody sees me taking a picture of their house?” My response is like, “Tell them you’re looking to buy a property and you liked that one.” Don’t try to pretend like you’re not taking a picture of their house. That’s weird. You need to tell them straight up, “I’m looking to buy properties and I liked this one.” They’ll tell you things you didn’t even ask for like, “Stay away from that house, and this house over here has roaches.” They’ll tell you about everything you didn’t even ask for.

That’s funny you say that. It’s also funny that the truth is always the best answer. If someone asks you, tell them the truth. That’s how the truth works. It’s good. I’m going to ask you something that’s subject to change. These interviews are evergreen and they’re out there for a long time. Tell us how much DealMachine is and what it costs? The audience out there, Dave and his company have the right to change his price anytime he wants to and it’s going to change because it always does. Sometimes up, sometimes down, sometimes they add more value to the price.

The basic plan is $49 a month. You get a two-week free trial. We’ve got two other plans as well. There’s a $99 a month plan. The enterprise plan is $3,000 a year and that lets you have 300 deal finders faster and an established operator that wants to scale this far. We’ve got different mail pieces that range from pricing to $0.49 to $1.47. The $1.47 is a ballpoint pen mail piece written by a robot. It’s going to look like handwriting. It will look authentic whenever it comes to the seller’s house. Those are the price points. Speaking of change, we’re planning on coming out with a free CRM. If you’re looking to organize your deals, you’ll be able to go in and start an account for free that would allow you to organize all those deals.

I certainly suggest that you go over and try your two-week free trial. I read somewhere, are you giving away $30 worth of free mail?

Yeah, they get that whenever they sign up through your webpage that we set up.

REIS 443 | Driving For Dollars

Driving For Dollars: When you’re not really focusing on the art of trying to buy a house and just get out in the street, then sooner or later, you’ll find yourself buying a house all of a sudden.


I want you to go to 1000houses.com/Machine. That’s the same link we used last time that we interviewed David Lecko. We’re going to make the new additions, subtractions, or whatever. Take advantage, $49 per month, get two weeks free. There’s a $99 a month level. For real pros, there’s a $3,000 one-time fee. I’m interested in that $3,000 one-time fee. Tell me about that.

It lets you have 300 deal finders. People out there are looking for properties for you. It has a signup page.

Talking about deal finders because even I was slow to figure out what you were talking about. A deal finder is when you have the app, you can assign people. I told you I have people that drive for me by the day. You can get people like the mailman or the garbage man. You can talk to them and sign them up as a deal finder for you. When they take pictures, it’s on your account. The letter goes out of your account. It earmarks which person was responsible for starting that mailer or that acquisition in motion with a single click of a camera. You can offer them bonuses or you could pay them per picture. You could pay them per success. It’s like, “I’ll pay you $500 every time one of those pictures turns into a deal.” You figure out what you’ve got to do. He’s saying the $3,000, we’ll give you 300 of those. If you have the mentality to figure out how to get 300 people interested in snapping pictures of houses for you, then that’s a good deal because I don’t see how you don’t make up $3,000 in a year if you have 300 doing it. How are people getting 300 people to do this?

We’ve got a signup page and a training portal for the drivers. They’ll post a job ad on Indeed and the call to action at the end of the job ad will be to go to this page, signup, add twenty properties, and I’ll pay you $20 via Venmo. We provide that signup page that lets people get inside your account without you intervening. You can also enable the training portal so those drivers can watch a few videos that explain how and where you want them to drive. I was running into the issue where I would set up a bunch of interviews, 1 out of 5 people would show up and then that fifth person would fizzle out, move to Florida, or something random. I was wasting all this time recruiting and training.

We’ve built the technology to do a lot of that heavy lifting and let them jump through some of those hoops. By the time they get there and they add a few properties, they’re already familiar with you, the technology and they’ve proven they’re serious because they’ve added a few properties. You pay them right away, so that gets them excited and then you can sit down for a more formal conversation and interview them. I built a tool like that so I would not have to be wasting my time sorting through those résumés.

I always liked the mailman. He’s driving through the neighborhood anyways. He knows when people moved out. He knows when the bill collectors are after him because he sees the mail. I’ve always liked the mailman. I’ve always liked the garbage man too. It doesn’t cost them anything to drive the town. When you give them a check, it’s a 100% profit because they were on a rig that was paid for by the company, anything like that. I also thought in the summertime in Texas, the ice cream man, the one that drives all the neighborhoods selling the ice cream.

The truth is always the best answer. Share on X

There’s a reason why I bought a house every 4 to 5 days for over two decades. That’s because I have my fingers in every way to do it. I’m quite interested. I may not be doing it at all because my first idea is I have two apprentices of acquisition guys. I have two solid acquisition guys. We’ve got two apprentices and put it under them. I want to call those apprentices and say, “For $50 a month, you can add to your chances of finding a house. This is what you do. Watch the training video over there at DealMachine and get some deal finders to put under you. Start getting some leads on some houses that you’re not necessarily out there having to work for yourself. The leads will come in and that’s how you go from doing 10 or 15 houses to doing a lot of houses. People will do a lot of other things. This would be one of them. When do you suggest people get started, Dave?

There’s no time like right now, Mitch.

Somehow, I knew the answer to that. Go to 1000houses.com/Machine and get your free $30 worth of mail. There are mail-outs that range from $0.49 to $1.47 apiece. What’s cool about this thing is they have to take the picture, pick the wording, hit the button and that piece is going out in the mail right from the front seat of your truck. How many times have you written down an address of a house that you wanted to send a mailer to and it sat in your car or in the console of your car for a long time and it didn’t get done? This solves that problem.

That was the main reason I got it at first when you first started out. You didn’t have all the features either. I wanted to be able to take a picture and hit send. I didn’t have to worry about going to the office, lick a stamp and putting on an address on an envelope or doing anything. I just had to hit that button and it was done. If I saw seven houses that day or that morning in a particular neighborhood, all seven of them were done and it was off my plate. It’s a great deal. I’m proud of you and glad that you did it. I hope that you’re having a huge success with it because it’s a great idea.

Thank you. We’re having a great time keeping, making it better. It’s a process. With LiveComm, you’ve been working on it for a few years as well. You make bugs when you make new features. It feels like you’re taking two steps backward before you can take another step forward. It’s rewarding when it comes together. People have success stories and it solves a problem for yourself and others. Congrats to you too.

REIS 443 | Driving For Dollars

Driving For Dollars: Don’t just look for the absentee owner. Just remember to look for the distressed properties.


The DealMachine and LiveComm, they’re many different products than the day that you first announced it and they’ve gone through their consortium. If you’ve tried them before and whatever your experience was, try it again because it’s not the same anymore. It’s improved. As long as we keep applying ourselves all the time, things get better. They stabilize, they ratchet up, and you finally get it to where you want. It takes a little work sometimes. If you’ve tried it and try it again. If you haven’t tried it, definitely try it now because we’re a long way down the road from where we first started. 1000houses.com/Machine and check it out. You get two weeks free and you’ll get $30 worth of free mail when you sign up. Anything else you want to say to those first-time real estate investors that are out there?

I would say don’t just look for the vacant. Don’t just look for the absentee owner. Remember to look for the distressed properties. Anything that’s distressed is something that you want to add and there’s a whole lot of them out there. You’re going to find a lot of properties. You’ve got to dedicate some time to your schedule to make it happen.

Imagine you’re driving down the street, look at those houses, and then find one. You say, “I imagine the person that owns that house is having a problem or would like to get rid of it. I can feel it by looking at the house. They can’t be happy about owning this house.” When you take a picture of it and stand right, you’re looking for the pain. Dave, thanks for being on.

Thanks, Mitch.

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See you, Mitch.


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About David Lecko

REIS 443 | Driving For Dollars

David Lecko is the CEO of DealMachine, an app that enables real estate investors to find off-market deals and contact any property owner via direct mail, email, and phone with a single click.

In the last year, the app has been downloaded over 80,000 times and used to capture over 4,000,000 potential deals by “driving for dollars” teams.

DealMachine has added millions of dollars of revenue to scaling home-buying businesses around the United States.



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