There are actually two engines that drive my personal real estate business as I continually ask myself these questions: Is this marketing technique geared toward finding a person with a problem or a property. I've found that I always look for people with problems and the properties come. Is this marketing technique significantly different than the next guy or gal? See, I'm just not going to let myself get grouped together in the middle of the pack of other real estate investors. In this group at times you'll find everyone trying to sell the same flavor of ice cream: Vanilla!! I like chocolate myself.
You want proof of what I'm talking about? Open up your Sunday classifieds and just count how many "I Buy House" ads there are. Are you starting to see my point? It is the above #2 listed pulse check that prompts me to do things smarter and more effective for bottom-line more sellers. This business is absolutely so much about marketing. In fact if you're into buying and selling real estate for big profits, then your primary operating procedure should start and end with finding truly motivated sellers. Period!
If you're with me thus far then what I've stated is all in "theory" and sounds great, right? What you as an investor really need is not only to show you where the water is but also how to drink it. Let's get to some nitty-gritty details on exactly what I'm getting to and want you to have a truly great opportunity to find more motivated sellers than you ever have. What I want to give you an overview of is what I call my "Check In The Mail" program. What does that mean? Well, I can assure you it is not about sending anyone money in the mail but making sure this happens:
Your Letters Get Opened and Not Trashed
The potential seller turns into a really motivated seller after receiving a check with their name on it. Complete instructions on how that seller can turn the check already in their hand into cash and real soon. There is absolutely something magically special to many, many potential sellers when they have a check in their hand with their name on it. About now you're probably thinking that you're not a billion dollar endowment fund to be throwing around money to get people to sell their house.....its not about that.
It is all about marketing with a significantly different and highly effective approach that I've used with many direct mail targets. Here it is in summary what you should very much key into if you're really into big profits and many motivated sellers to choose from. I use Versa Check Form #1000 check stock that can be picked up at any Staples, Office Max or Office Depot. This is check card stock that has a blank check at the very top 1/4 portion of the page. The remaining part of the page is white and blank. That is the section of the check where I fully explain my marketing angle with all the seller benefit laden solutions why they should call me immediately.
It will probably take you some "tweaking" with a standard Word document but all the letters and numbers will match up easily. I just make the check out to them and having my name signed on the bottom. The amount of the check and is simply stated "To Be Negotiated". I always start the letter out, "This check and more could be yours....." Then dependent upon the target market the written marketing of the text will be read by the seller.
I use standard double window envelopes so the person can see the color of the paper. You know, that check color paper. They just have to open it because they weren't expecting this money. Yes some people are a little "peeved" after opening the letter and "yes" it is a marketing ploy to get your letter opened.. but it works!!!! I also simply stamp on the outside of the letter too "Check Enclosed!" in red ink. Costs about $15 to get one of these stamps set up from like Staples/Office Max.
I've found that this technique works best on direct mail targets such as: Absentee Owners, Code Compliance, Bankruptcy, especially Pre-Foreclosure. You need somewhat "softer" approaches in direct mail to probate and divorce situations so I wouldn't advise it within those two areas. It is all about getting your letters opened to the target market you're mailing to. I simply don't have a response rate to report to you yet, but I can definitely tell a difference in recent months from deals coming my way.
This entire biz in real estate is all about working smarter, and not necessarily harder. Time is the most important commodity you have as a real estate investor and this simple technique maximizes the best use of your marketing dollars and bottom-line the amount of time spent on putting those deals together for big paydays. Give this approach a try and starting getting your phone ringing off the hook with motivated sellers. Good hunting as luck has absolutely nothing to do with it!
Tuesday, March 31, 2009
Running TV Ads to Find Deals
I used to run TV ads in order to find houses to buy, and I’ll give the pros and cons of doing it.
1) One plus is that more people are seeing your ad for every dollar spent than just about any other media. This can help to build brand awareness so that if someone falls into trouble a year after they saw your ad, they will hopefully remember your company’s name and look you up.
2) It will also increase your response rate with other ads you’re running. If someone sees your commercial one day, doesn’t respond, and then later gets a letter in the mail from you later on, they will be more likely to respond to your letter because your company has already gotten a foothold in their mind. This is what J. Conrad Levinson teaches in his Guerilla Marketing books.
3) It makes you look pretty darn professional. People who see the commercial know that you’re a serious player and will call you and trust you a heck of a lot more than if they just saw some handmade We Buy Houses sign teetering in the wind on a street corner.
4) You get a good amount of leads. When I ran TV ads, I got about 26 calls per month for the first month or two. The usual number of these leads were motivated sellers–about 1 out of every 8 or so. So, if I could have closed one deal out of every 3 prospects who called me, then I could conceivably have done one deal per month just from TV ads.
I became a licensee of another company that let you use their name and their pre-made TV commercials (I’ll go into this more in Part 2). The total cost of the ads plus their monthly fee was $2600. Would you pay $2600 in ads to find one house to buy every month? I would, though it’s a little high. My goal is to spend less than $2000 per deal on marketing costs.
5) Another plus was that I did not have to spend any time brainstorming, writing ads, or managing any of the pains that come with other kinds of advertising (getting paper and stamps when you’re running low, making sure someone was sending mailers out on time, hanging up signs, etc). I would just send a check every month and be done with it, and that was nice.
So my cost per lead (call) ended up being about $100, at least after the first 2 months. Since one out of 8 leads was a real (motivated) prospect, my cost per prospect was $800. This was terrific. Then, for some reason, the ads didn’t work well a few months in a row. After about 6 months, I felt I had enough data to use to decide if I wanted to continue or not.
After all, you can’t judge an ad campaign solely on its first month’s performance. It might have been a really good month or a really bad one, and the only way to know for sure is to try it for a while and see how it does over time.
The downsides:
After 6 months, I looked at the numbers. It had cost me $15,600 in ads and we had done 3 deals from it. This meant that my cost per deal was over $5000, which was unacceptable. Think of the ways you have found deals before, and what they cost you. Would you have kept doing it?
I would have kept running them if it were for a different industry than real estate. If I could pay $15,600 now and sell $60,000 worth of my courses, I’d do it in a hearbeat. But real estate investing is different, because:
1) Each house requires even more money to make the deal work. So it makes sense to have the lowest cost per deal imaginable, so you can reserve your limited funds for things like repairing houses, paying your assistant or yourself, and actually doing deals.
2) Each deal takes time to do. So you might spend thousands of dollars on ads, and tie the money up for 3, 4, 5, 6, or more months before you get it back again from the sale of the house. If you keep the house as a rental, it may take even longer. Most of us cannot afford to have our limited funds tied up for so long, and the more you spend on ads, the more likely you are to wake up one day with a negative balance in your bank account.
3) Each house contains an element of risk. You may believe that you will make $20,000 or $30,000 from the sale of a house, but you never know for sure until the deal is done. It’s not as sure of a thing as simply handing a customer a product in exchange for payment the same day.
These are all things I would keep in mind when considering television ads to find houses to buy. My experience was mine alone, and yours might be totally different. If after reading this, you’d prefer not to run TV ads, fine. If you’d like to try it, remember to keep these considerations in mind and give it the proper planning and budgeting that any serious ad campaign deserves.
1) One plus is that more people are seeing your ad for every dollar spent than just about any other media. This can help to build brand awareness so that if someone falls into trouble a year after they saw your ad, they will hopefully remember your company’s name and look you up.
2) It will also increase your response rate with other ads you’re running. If someone sees your commercial one day, doesn’t respond, and then later gets a letter in the mail from you later on, they will be more likely to respond to your letter because your company has already gotten a foothold in their mind. This is what J. Conrad Levinson teaches in his Guerilla Marketing books.
3) It makes you look pretty darn professional. People who see the commercial know that you’re a serious player and will call you and trust you a heck of a lot more than if they just saw some handmade We Buy Houses sign teetering in the wind on a street corner.
4) You get a good amount of leads. When I ran TV ads, I got about 26 calls per month for the first month or two. The usual number of these leads were motivated sellers–about 1 out of every 8 or so. So, if I could have closed one deal out of every 3 prospects who called me, then I could conceivably have done one deal per month just from TV ads.
I became a licensee of another company that let you use their name and their pre-made TV commercials (I’ll go into this more in Part 2). The total cost of the ads plus their monthly fee was $2600. Would you pay $2600 in ads to find one house to buy every month? I would, though it’s a little high. My goal is to spend less than $2000 per deal on marketing costs.
5) Another plus was that I did not have to spend any time brainstorming, writing ads, or managing any of the pains that come with other kinds of advertising (getting paper and stamps when you’re running low, making sure someone was sending mailers out on time, hanging up signs, etc). I would just send a check every month and be done with it, and that was nice.
So my cost per lead (call) ended up being about $100, at least after the first 2 months. Since one out of 8 leads was a real (motivated) prospect, my cost per prospect was $800. This was terrific. Then, for some reason, the ads didn’t work well a few months in a row. After about 6 months, I felt I had enough data to use to decide if I wanted to continue or not.
After all, you can’t judge an ad campaign solely on its first month’s performance. It might have been a really good month or a really bad one, and the only way to know for sure is to try it for a while and see how it does over time.
The downsides:
After 6 months, I looked at the numbers. It had cost me $15,600 in ads and we had done 3 deals from it. This meant that my cost per deal was over $5000, which was unacceptable. Think of the ways you have found deals before, and what they cost you. Would you have kept doing it?
I would have kept running them if it were for a different industry than real estate. If I could pay $15,600 now and sell $60,000 worth of my courses, I’d do it in a hearbeat. But real estate investing is different, because:
1) Each house requires even more money to make the deal work. So it makes sense to have the lowest cost per deal imaginable, so you can reserve your limited funds for things like repairing houses, paying your assistant or yourself, and actually doing deals.
2) Each deal takes time to do. So you might spend thousands of dollars on ads, and tie the money up for 3, 4, 5, 6, or more months before you get it back again from the sale of the house. If you keep the house as a rental, it may take even longer. Most of us cannot afford to have our limited funds tied up for so long, and the more you spend on ads, the more likely you are to wake up one day with a negative balance in your bank account.
3) Each house contains an element of risk. You may believe that you will make $20,000 or $30,000 from the sale of a house, but you never know for sure until the deal is done. It’s not as sure of a thing as simply handing a customer a product in exchange for payment the same day.
These are all things I would keep in mind when considering television ads to find houses to buy. My experience was mine alone, and yours might be totally different. If after reading this, you’d prefer not to run TV ads, fine. If you’d like to try it, remember to keep these considerations in mind and give it the proper planning and budgeting that any serious ad campaign deserves.
Referral-Based Investing, Part Two (Wholesalers)
In the first part of this article, we covered why it’s much easier to find multiple deals from the same person, and how the satisfied sellers you have bought from only know so many people to refer to you. In this part, I’m going to go through some strategies to use to build relationships with the people who are in a position to refer more motivated sellers to you over time than anyone else — Wholesalers.
As you probably know, you can find some amazing deals from other investors in your area who sell them as-is, or assign a contract they have with a seller to you for a fee. Some of these guys are amazing at finding a large number of deals every month. Because having someone call you with a deal that they have already found, prescreened, and negotiated with, this is one of the easiest ways to find deals there is.
Become the first one they call.
But are you going to be the one they call as soon as they have a deal available (or at least one of the first few)? One challenge is that most wholesalers know other investors, and there are a few ways they could decide who to contact with a deal. They may have a small core few that they tell about deals, who they know can perform without jerking them around. If this is the case, you want to be one of those few (or the only one).
Many wholesalers have Investor Lists, too, which can range from 10-20 to hundreds of other investors in the area. They might contact their core investors first and then send it out to their whole Investors List a few days later. Your goal is to find out about the deal before it’s announced to their entire list. You can do this by:
Getting into their group of core investors by proving that you have the funds and speed to close when they want, and that you’re not going to be anal about everything or nickel and dime them. The easier you are to work with, the sooner you will tend to be contacted.
Being proactive and contacting them first before they tell the world about their deal. For example, if you send regular emails or follow-up frequently with the wholesalers you know, you might ask if they have any good deals in the works. They may be in the process of getting an offer accepted by a motivated seller, in which case you can pre-arrange for them to give you the chance to buy it as soon as they have it under contract. If nothing else, their incentive to do this is so they won’t have to take calls from 10-20 other interested investors about it later on — this way is much easier for them.
Wholesalers who only accept the highest offer
Some wholesalers are a little more mercenary and will assign a deal to whoever will pay them the most — period. This stinks for you because, well, competition sucks, and you have to rush, rush, rush in order to see the house, make an offer, and get it assigned to you.
I don’t know about you, but Rush = Hassle, and I prefer having less hassle in my life every day of the week. I don’t like being part of a bidding war at all, and the chances of your offer getting accepted are slim, because there are usually other people on the wholesaler’s Investor List who are willing to pay too much, or at least more than you.
The disadvantage to the wholesaler of doing it this way is that the people who are willing to pay the most are often peculiar, or nitpicky, or have to get bank financing, which takes 30 days to do if you’re lucky. That’s a long time to close (especially when a motivated seller is calling the wholesaler daily, asking when they’ll get their money). You could point this out to the wholesalers you know, and mention that they’ll have a faster and easier sale if they come to you first, rather than creating a mini-auction.
This may change their mind, or it may not. But keep asking them to notify you of deals, even if they only care about who will pay the most — you can always say, "This is the most I can offer" and see what happens. I’d rather have more leads brought to me than fewer. Who knows? The wholesaler may get burned a few times by novice investors who could not close, or who made the process miserable, and they start contacting only a select few about houses.
The Magic Formula for Getting Deals From Wholesalers
Here’s a formula to keep in mind, to find more deals through wholesalers:
# of Wholesalers x Frequency of Contact x Depth of Relationship = # of Deals
The more you meet, the more will notify you of deals. The more you contact them, the more likely you are to find out about a deal of theirs before anyone else. The better you know them and the more they trust you, the more likely they will call you before anyone else. The great any of these three things are, the more deals you will do.
As you probably know, you can find some amazing deals from other investors in your area who sell them as-is, or assign a contract they have with a seller to you for a fee. Some of these guys are amazing at finding a large number of deals every month. Because having someone call you with a deal that they have already found, prescreened, and negotiated with, this is one of the easiest ways to find deals there is.
Become the first one they call.
But are you going to be the one they call as soon as they have a deal available (or at least one of the first few)? One challenge is that most wholesalers know other investors, and there are a few ways they could decide who to contact with a deal. They may have a small core few that they tell about deals, who they know can perform without jerking them around. If this is the case, you want to be one of those few (or the only one).
Many wholesalers have Investor Lists, too, which can range from 10-20 to hundreds of other investors in the area. They might contact their core investors first and then send it out to their whole Investors List a few days later. Your goal is to find out about the deal before it’s announced to their entire list. You can do this by:
Getting into their group of core investors by proving that you have the funds and speed to close when they want, and that you’re not going to be anal about everything or nickel and dime them. The easier you are to work with, the sooner you will tend to be contacted.
Being proactive and contacting them first before they tell the world about their deal. For example, if you send regular emails or follow-up frequently with the wholesalers you know, you might ask if they have any good deals in the works. They may be in the process of getting an offer accepted by a motivated seller, in which case you can pre-arrange for them to give you the chance to buy it as soon as they have it under contract. If nothing else, their incentive to do this is so they won’t have to take calls from 10-20 other interested investors about it later on — this way is much easier for them.
Wholesalers who only accept the highest offer
Some wholesalers are a little more mercenary and will assign a deal to whoever will pay them the most — period. This stinks for you because, well, competition sucks, and you have to rush, rush, rush in order to see the house, make an offer, and get it assigned to you.
I don’t know about you, but Rush = Hassle, and I prefer having less hassle in my life every day of the week. I don’t like being part of a bidding war at all, and the chances of your offer getting accepted are slim, because there are usually other people on the wholesaler’s Investor List who are willing to pay too much, or at least more than you.
The disadvantage to the wholesaler of doing it this way is that the people who are willing to pay the most are often peculiar, or nitpicky, or have to get bank financing, which takes 30 days to do if you’re lucky. That’s a long time to close (especially when a motivated seller is calling the wholesaler daily, asking when they’ll get their money). You could point this out to the wholesalers you know, and mention that they’ll have a faster and easier sale if they come to you first, rather than creating a mini-auction.
This may change their mind, or it may not. But keep asking them to notify you of deals, even if they only care about who will pay the most — you can always say, "This is the most I can offer" and see what happens. I’d rather have more leads brought to me than fewer. Who knows? The wholesaler may get burned a few times by novice investors who could not close, or who made the process miserable, and they start contacting only a select few about houses.
The Magic Formula for Getting Deals From Wholesalers
Here’s a formula to keep in mind, to find more deals through wholesalers:
# of Wholesalers x Frequency of Contact x Depth of Relationship = # of Deals
The more you meet, the more will notify you of deals. The more you contact them, the more likely you are to find out about a deal of theirs before anyone else. The better you know them and the more they trust you, the more likely they will call you before anyone else. The great any of these three things are, the more deals you will do.
Referral-Based Investing, Part One
I’m all about getting more for doing less. Not (usually) because I am lazy, but because by spending less time on one thing, it frees me up to do something else that I couldn’t have done otherwise. Or, by spending less on something, it means I have more money to spend on other things. And when you’re talking about motivated seller prospects, more is better.
Yet we investors continue to advertise in ways that require us to find and win over new customers over and over again, every time. Think about it — has a seller in distress ever sold you his house, and later, because you did such a great job the first time, decided to fall behind on payments again and sell you another house? It doesn’t happen (with the possible exception of finding a burned-out landlord who wants to dump his entire portfolio on you).
This means that time and time again, investors have to run ads, send out our message, build trust, and get people to respond. That sounds like a lot of work, and it is! Ask any business owner...What is easier to do — to win over new customers or to get a repeat sale from the same customer? The repeat sale is much easier because the hard part (ads, message, trust) has been done already. (And, of course, our "customers" are sellers who we buy from, not sell to, but the marketing principles are the same).
Running ads costs money and takes time. Over and over again. I want to suggest a different way to generate leads, that isn’t going to be the main method you use, but will probably get you qualified leads for years to come, with a minimal cost. I’m talking about referrals.
From whom? Not from people you have bought houses from before. Because even if you did everything you said you would, bought their house on the date of their choice, and even hired a moving company to help them get into their new home in style, Average Joes only know so many people. Motivated sellers are just good, regular people. They hardly know any motivated sellers anymore than you would if you weren’t actively searching for them for a living.
Our business is not normal. You won’t find many mailing lists of motivated sellers. There aren’t TV shows made for motivated sellers during which you can run commercials. There aren’t chat rooms where motivated sellers hang out and talk where you can easily find them. This is why I recommend fulfilling your promises to those you buy houses from, but don’t expect them to send a flood of referrals your way. They just don’t come across other people in distress that often, and they frequently move out of state, never to be heard from again.
So who can you get referrals from? People in a position where they meet potentially motivated sellers. Think about who they might be. I’m going to name a few types, but I’m sure I’m missing some (or saving them for my next course). So think of the reasons why sellers become motivated, and then think of the types of people who might know about their problems.
Wholesalers are obvious, and probably the most consistent producers of referrals since they are actively searching for them every day. And frankly, some of them are geniuses at finding tons and tons of potential deals. How they do it, I’ll never know. Why they don’t fix up and sell the houses themselves, I’ll never know (and will never ask). But they find them, so be sure to network with them as much as possible. The only downside is that they will want to be paid, and you might make $5,000 - $10,000 or so less than you would have, but so what, as long as your profit is acceptable.
Some less obvious types of people to get referrals from are bankruptcy attorneys, probate attorneys, realtors, and the person in charge of loss mitigation in small banks (big ones have call centers for that purpose several time zones away). I’m going to go into more detail later about the means by which you introduce yourself, deliver your marketing message, build a relationship with them, and get them to respond (does this process sound familiar?).
For the time being, just understand that it makes more sense to do the work with these people once, with some follow-up from time to time, and have them refer motivated sellers over and over again over time. This will allow you to get more (deals) for doing less (hustling and bush - beating), which, as I said, I’m all about doing in just about every endeavor.
Yet we investors continue to advertise in ways that require us to find and win over new customers over and over again, every time. Think about it — has a seller in distress ever sold you his house, and later, because you did such a great job the first time, decided to fall behind on payments again and sell you another house? It doesn’t happen (with the possible exception of finding a burned-out landlord who wants to dump his entire portfolio on you).
This means that time and time again, investors have to run ads, send out our message, build trust, and get people to respond. That sounds like a lot of work, and it is! Ask any business owner...What is easier to do — to win over new customers or to get a repeat sale from the same customer? The repeat sale is much easier because the hard part (ads, message, trust) has been done already. (And, of course, our "customers" are sellers who we buy from, not sell to, but the marketing principles are the same).
Running ads costs money and takes time. Over and over again. I want to suggest a different way to generate leads, that isn’t going to be the main method you use, but will probably get you qualified leads for years to come, with a minimal cost. I’m talking about referrals.
From whom? Not from people you have bought houses from before. Because even if you did everything you said you would, bought their house on the date of their choice, and even hired a moving company to help them get into their new home in style, Average Joes only know so many people. Motivated sellers are just good, regular people. They hardly know any motivated sellers anymore than you would if you weren’t actively searching for them for a living.
Our business is not normal. You won’t find many mailing lists of motivated sellers. There aren’t TV shows made for motivated sellers during which you can run commercials. There aren’t chat rooms where motivated sellers hang out and talk where you can easily find them. This is why I recommend fulfilling your promises to those you buy houses from, but don’t expect them to send a flood of referrals your way. They just don’t come across other people in distress that often, and they frequently move out of state, never to be heard from again.
So who can you get referrals from? People in a position where they meet potentially motivated sellers. Think about who they might be. I’m going to name a few types, but I’m sure I’m missing some (or saving them for my next course). So think of the reasons why sellers become motivated, and then think of the types of people who might know about their problems.
Wholesalers are obvious, and probably the most consistent producers of referrals since they are actively searching for them every day. And frankly, some of them are geniuses at finding tons and tons of potential deals. How they do it, I’ll never know. Why they don’t fix up and sell the houses themselves, I’ll never know (and will never ask). But they find them, so be sure to network with them as much as possible. The only downside is that they will want to be paid, and you might make $5,000 - $10,000 or so less than you would have, but so what, as long as your profit is acceptable.
Some less obvious types of people to get referrals from are bankruptcy attorneys, probate attorneys, realtors, and the person in charge of loss mitigation in small banks (big ones have call centers for that purpose several time zones away). I’m going to go into more detail later about the means by which you introduce yourself, deliver your marketing message, build a relationship with them, and get them to respond (does this process sound familiar?).
For the time being, just understand that it makes more sense to do the work with these people once, with some follow-up from time to time, and have them refer motivated sellers over and over again over time. This will allow you to get more (deals) for doing less (hustling and bush - beating), which, as I said, I’m all about doing in just about every endeavor.
Quick Tips For Serious Real Estate Investors
You want to have a lot of leads and your marketing will bring them to you. Drive those leads into a local number even if you are not local to them. They are going feel secure. The prospect list that you are mailing to is going to feel more secure if they are calling a local number than if they are calling an 800 number. The perception of an 800 number is that it is a big company, but if it is a local number then it just must be the guy down the street that buys houses.
I also recommend using an answering service. If you have people go to voicemail you will lose 50% of your callers. Understand that motivated sellers are really hoping that nobody is there that way they can say well I called but nobody answered the phone. You have to have a live person answering the call. If you have a voicemail 50% of them will not leave a message. The other thing about an answering service is you are going to get seller phone calls at all times of the day and the night. And it’s not always going to be the most convenient time for you. You could be at a nice restaurant and all of a sudden you get this seller call and it is just not going to be appropriate. Or like me, I’m working on something and all of a sudden I get a seller call and it is hard to switch your mental thought process to get ready for this seller call. It is easier if somebody else answers it. One great answering service I recommend to my students is weanswer.com.
What you do is give them your script of questions you’d like to be answered. A live person will answer the phone as if they are your company. In other words, let’s say that you are Mike Buys Houses. They will answer the phone Mike Buys Houses how may I help you? “Um yeah can I speak to Mike?” They will take the information for you and ask the questions that you have in your script then e-mail you the details. Then you can call them back at your convenience. Even if you are going to call them back right away what an advantage it is to already have that information. Now you have the address so you can go in and pull comps before you call them back and know what the property is worth. You can figure out how much you think you might be able to offer for the property before speaking with them. The only thing that is going to be missing for you is repairs which you will get from them when you start talking to them. You can formulate your plan even before you get on the phone with them.
Remember when you get on the phone what your purpose is. The purpose at this point is not to try to sell your service to them. It is not to buy the house. The first purpose of the phone call is to prequalify the caller. Remember I told you you have prospects versus leads. You want to now separate the prospects from the leads. They are all leads coming in but what you want to separate is the tire kickers from the ones that are real motivated sellers. And that prequalification process should take no more than 5-10 minutes on the phone. What you are looking for is the answer to two questions.
First, are they motivated and second are the numbers going to work? Unfortunately you can’t say are you motivated to sell your house. You are going to have to build some rapport with them and find out from the questions you are asking what kind of motivation is there. Why is it that they are looking to sell there house right now? How soon do they need to move out? The biggest indication to me as to whether they are motivated is when I start asking some of the personal questions. How much do they owe on their house and I throw out some lowball prices. When they just laugh at me and they almost don’t want to continue on then I know that this person is not really all that motivated. When I explain why I need this information or I explain why my price came in so low and they say “let’s go on” I know I have a motivated seller.
The next question is; Are the numbers even going to work? Are we playing in the same ball park? I don’t have to zero in on the number yet, but I need to get an idea. If I can only pay $150,000, but they owe $250,000, then we aren’t even in the same ballpark. Or if they are adamant that they have to get at least 200 and I am at 150 well we are pretty far apart. If I can’t get them off that number then why go forward, because I don’t want to spend an hour with each caller. The first five or ten minutes is just about deciding whether I want to move forward with this caller or not. If they are motivated then I will spend an hour, hour and a half with this person really building a rapport. I will go as far as making some ballpark offers based on what I already know from the comps and from what they told me about the house. I ask them some questions about the house and based on what they told me give them a ballpark on what repairs will cost. I will give them a ballpark offer if they seem flexible, if it seems like something that they want, I will go to the next step. If it is a local house then go out and visit it and if you are working out of a different city then certainly you have somebody on the ground that you are working with. Don’t send your eyes on the ground to every house only to the ones where it looks like there is really going to be a deal.
If you handle your incoming leads that way then you won’t find your incoming leads to be overwhelming. So many investors complain about having too many leads coming in. You know I have 60 leads coming in I can’t spend an hour on the phone with each one of these leads. What you want to do is prequalify and find out which ones of are motivated and will turn into a deal. That is where you want to spend your time anyway right? You don’t want to spend your time with a tire kicker. You want to spend your time with somebody who actually has a deal.
I also recommend using an answering service. If you have people go to voicemail you will lose 50% of your callers. Understand that motivated sellers are really hoping that nobody is there that way they can say well I called but nobody answered the phone. You have to have a live person answering the call. If you have a voicemail 50% of them will not leave a message. The other thing about an answering service is you are going to get seller phone calls at all times of the day and the night. And it’s not always going to be the most convenient time for you. You could be at a nice restaurant and all of a sudden you get this seller call and it is just not going to be appropriate. Or like me, I’m working on something and all of a sudden I get a seller call and it is hard to switch your mental thought process to get ready for this seller call. It is easier if somebody else answers it. One great answering service I recommend to my students is weanswer.com.
What you do is give them your script of questions you’d like to be answered. A live person will answer the phone as if they are your company. In other words, let’s say that you are Mike Buys Houses. They will answer the phone Mike Buys Houses how may I help you? “Um yeah can I speak to Mike?” They will take the information for you and ask the questions that you have in your script then e-mail you the details. Then you can call them back at your convenience. Even if you are going to call them back right away what an advantage it is to already have that information. Now you have the address so you can go in and pull comps before you call them back and know what the property is worth. You can figure out how much you think you might be able to offer for the property before speaking with them. The only thing that is going to be missing for you is repairs which you will get from them when you start talking to them. You can formulate your plan even before you get on the phone with them.
Remember when you get on the phone what your purpose is. The purpose at this point is not to try to sell your service to them. It is not to buy the house. The first purpose of the phone call is to prequalify the caller. Remember I told you you have prospects versus leads. You want to now separate the prospects from the leads. They are all leads coming in but what you want to separate is the tire kickers from the ones that are real motivated sellers. And that prequalification process should take no more than 5-10 minutes on the phone. What you are looking for is the answer to two questions.
First, are they motivated and second are the numbers going to work? Unfortunately you can’t say are you motivated to sell your house. You are going to have to build some rapport with them and find out from the questions you are asking what kind of motivation is there. Why is it that they are looking to sell there house right now? How soon do they need to move out? The biggest indication to me as to whether they are motivated is when I start asking some of the personal questions. How much do they owe on their house and I throw out some lowball prices. When they just laugh at me and they almost don’t want to continue on then I know that this person is not really all that motivated. When I explain why I need this information or I explain why my price came in so low and they say “let’s go on” I know I have a motivated seller.
The next question is; Are the numbers even going to work? Are we playing in the same ball park? I don’t have to zero in on the number yet, but I need to get an idea. If I can only pay $150,000, but they owe $250,000, then we aren’t even in the same ballpark. Or if they are adamant that they have to get at least 200 and I am at 150 well we are pretty far apart. If I can’t get them off that number then why go forward, because I don’t want to spend an hour with each caller. The first five or ten minutes is just about deciding whether I want to move forward with this caller or not. If they are motivated then I will spend an hour, hour and a half with this person really building a rapport. I will go as far as making some ballpark offers based on what I already know from the comps and from what they told me about the house. I ask them some questions about the house and based on what they told me give them a ballpark on what repairs will cost. I will give them a ballpark offer if they seem flexible, if it seems like something that they want, I will go to the next step. If it is a local house then go out and visit it and if you are working out of a different city then certainly you have somebody on the ground that you are working with. Don’t send your eyes on the ground to every house only to the ones where it looks like there is really going to be a deal.
If you handle your incoming leads that way then you won’t find your incoming leads to be overwhelming. So many investors complain about having too many leads coming in. You know I have 60 leads coming in I can’t spend an hour on the phone with each one of these leads. What you want to do is prequalify and find out which ones of are motivated and will turn into a deal. That is where you want to spend your time anyway right? You don’t want to spend your time with a tire kicker. You want to spend your time with somebody who actually has a deal.
Network Your Way To Millions
Let's cut to the chase.
The goal is a few hundred leads per month. You want billboards, commercials, and mass mailers going out in the tens of thousands.
There is only one small problem...
You currently have $327 a month available for marketing.
What do you do?
You have champagne taste and a malt liquor budget.
Simply put, you must start where you are and work your way up. And where you are is broke, by the way. Let that both embarrass you and motivate you at the same time. Don't like it? Oh yes, you do. If you really didn't like it, you'd change it. It's comfortable to you, and you're scared of anything else. You don't want the responsibility.
Isn't that true?
How does that make you feel?
You need to become a networking machine. You need to start networking so consistently and constantly that you literally hand out 95 business cards to imaginary people in your dreams at night.
Doesn't sound fun, does it? Well how much fun is being broke? Which one is less funner to you?
The answer to that question will determine whether or not you get off your lazy arse and DO something about your life.
You gotta get in the mix, man. Mix it up. Stir it up. Put it in the oven and bake it till a cash cake appears out of nowhere.
Then eat it.
Eating the cash cake is so fun, let me tell you. Oh how glorious when cash cakes just come to you every day. What a life.
But you gotta pay your dues.
No dues? No cake. No cake for you!
Your entire community needs to know that you buy houses and close fast. That you're the "go to" guy or gal when someone needs their house sold quickly.
How do you plan on accomplishing this?
If you have lots of money then this is easy. If you don't, then it takes work and high levels of creativity.
Are you willing to work? How willing are you to put in some 15 hour days to really get this thing off the ground? Are you all talk by any chance? Or are you one of those rare souls who actually make something happen in this world? Who are you really?
Get out there and make some friends. Hand your card out to every single person who comes within a 3 foot radius of you. The exact card to use and the unbelievably easy conversation you need to have with these people are in my digital book that you should already have by now.
I was just having lunch with a friend of mine who has been in the real estate investing game for years already. He still hands his business card out to people in an effort to get new leads. As a matter of fact he just recently did a deal that he made over $20,000 on, and he got it from handing his business card out to a stranger at my office - Starbucks!
It is more comfortable to do nothing. It feels better to stay home and watch tv. But does it feel better really? How do you feel about yourself? About your life? On a scale of 1 to 10, how much do you think your spouse respects you and what you have accomplished in life? How does that feel? Do your kids respect you or pity you? How does that feel?
Are you really safer doing nothing?
Me personally, I would rather die doing something than live doing nothing.
Get out there and mix it up. Shake it. Flip it. Bake a cash cake. Eat it. Smash it in your boss' face. Whatever.
Until you have the funds for the big time marketing...network your way to millions.
The goal is a few hundred leads per month. You want billboards, commercials, and mass mailers going out in the tens of thousands.
There is only one small problem...
You currently have $327 a month available for marketing.
What do you do?
You have champagne taste and a malt liquor budget.
Simply put, you must start where you are and work your way up. And where you are is broke, by the way. Let that both embarrass you and motivate you at the same time. Don't like it? Oh yes, you do. If you really didn't like it, you'd change it. It's comfortable to you, and you're scared of anything else. You don't want the responsibility.
Isn't that true?
How does that make you feel?
You need to become a networking machine. You need to start networking so consistently and constantly that you literally hand out 95 business cards to imaginary people in your dreams at night.
Doesn't sound fun, does it? Well how much fun is being broke? Which one is less funner to you?
The answer to that question will determine whether or not you get off your lazy arse and DO something about your life.
You gotta get in the mix, man. Mix it up. Stir it up. Put it in the oven and bake it till a cash cake appears out of nowhere.
Then eat it.
Eating the cash cake is so fun, let me tell you. Oh how glorious when cash cakes just come to you every day. What a life.
But you gotta pay your dues.
No dues? No cake. No cake for you!
Your entire community needs to know that you buy houses and close fast. That you're the "go to" guy or gal when someone needs their house sold quickly.
How do you plan on accomplishing this?
If you have lots of money then this is easy. If you don't, then it takes work and high levels of creativity.
Are you willing to work? How willing are you to put in some 15 hour days to really get this thing off the ground? Are you all talk by any chance? Or are you one of those rare souls who actually make something happen in this world? Who are you really?
Get out there and make some friends. Hand your card out to every single person who comes within a 3 foot radius of you. The exact card to use and the unbelievably easy conversation you need to have with these people are in my digital book that you should already have by now.
I was just having lunch with a friend of mine who has been in the real estate investing game for years already. He still hands his business card out to people in an effort to get new leads. As a matter of fact he just recently did a deal that he made over $20,000 on, and he got it from handing his business card out to a stranger at my office - Starbucks!
It is more comfortable to do nothing. It feels better to stay home and watch tv. But does it feel better really? How do you feel about yourself? About your life? On a scale of 1 to 10, how much do you think your spouse respects you and what you have accomplished in life? How does that feel? Do your kids respect you or pity you? How does that feel?
Are you really safer doing nothing?
Me personally, I would rather die doing something than live doing nothing.
Get out there and mix it up. Shake it. Flip it. Bake a cash cake. Eat it. Smash it in your boss' face. Whatever.
Until you have the funds for the big time marketing...network your way to millions.
Marketing: Best Return on Investment
Do you have any mutual fund in your portfolio giving you a 1000% return on your investment? I didn't mistakenly enter the wrong figure. That is one-thousand percent and in addition what I'm talking about is for ONE month so annualized that's... well, I'll let all the bean counters figure that out. It is very attainable for that 10:1 return on your investment with prudent selection of where to place those marketing dollars that end results in truly great deals coming your way.
So many people are flocking to real estate seeking higher returns on their investments in recent years and especially since '00. Why? Well, the big fat 401K's have turned into 201K's and many people realized that really what people had banked on being there financially became all of a sudden money evaporating with every downturn of the stock market.
So, where are people now putting their money for investments? Real estate! Real estate has been a time-tested vehicle for short and long-term wealth and income and that was LONG before the .com and tech stock busts. Ok, probably nothing you don't know and haven't heard of right? So, now that we probably all know the actual and potential income for the average "Joe" through real estate the question is always "how do I get there?".
There are so many, many ways to profit in real estate and I'm never surprised from all those I meet at my speaking engagements as well as online students who make BIG money in real estate. I personally take notes on about successful characteristics of some that I would like to share with you:
* Average time is about two years to transition from corporate jobs to fulltime real estate investor.
* Both spouses contribute in some way to the real estate business.
* Investor possesses more than one profit-centered technique to make money in real estate. (wholesaling, landlording, etc...)
* Keeps accurate and ethical financial records.
* Live within their means on a personal financial level.
* Commits to a continued investment in their real estate education.
* One or both spouses have at one time or another been "downsized" being caught in corporate America crosshairs.
* Primary reason for investing in real estate is to have more time to spend with family and take control of their financial future.
* Feel that you DO NOT have to possess credit or money to make money in real estate.
* DESIRE to succeed…probably greatest succeed along with that positive attitude and don't listen to the naysayers.
In fact I had one student tell me their former manager in their corporate world stated that, "real estate investing is only for a tax write off". I'm not going to cast my pearls before swine and neither am I going to try to lead a horse to water that doesn't want to drink. Bottom-line is that this that now full-time real estate investor makes 2-3 times as much as the corporate executive.
With some of the general traits I've shared with you for fellow full-time real estate investors along with the absolute need for you to take control of your financial destiny means I've saved the biggest trait for last. Probably for many of you this may not be earth-shattering but the truth is that they all have a bona-fide marketing program fit to their budget, experience, short-term and long-term goals in real estate, coinciding with their profit-centered techniques.
Many stockbrokers make their living in speculating on undervalued stock and buying them in bulk. Corporate purchasing department executives will have their income tied into being able to make large gross profit buys on items their company may retail. Its all called the art of a deal and it simply doesn't matter which industry one is focused in when you're talking about moving a commodity its about being able to buy (and/or control) at the lowest price and sell at highest price possible. Difference in the middle is called a profit and is our motto in real estate: FIND A GREAT DEAL!!!
You may know 1002 creative ways to purchase and/or control properties but if its not a truly great deal to begin with then you only have a burden. So in having a system that locates truly motivated sellers to contact you on a consistent basis is what our whole business is about. It all starts with marketing and an investment that you feel comfortable with.
If you're not satisfied with the returns on your investment and you're in real estate or considering to be aggressive in real estate, then divert those funds into launching your own marketing IPO! Being able to control your own financial destiny if you're a competent real estate investor will result in what many of us already know….marketing is the best return on your investment!!
Good hunting as luck has absolutely nothing to do with it.
So many people are flocking to real estate seeking higher returns on their investments in recent years and especially since '00. Why? Well, the big fat 401K's have turned into 201K's and many people realized that really what people had banked on being there financially became all of a sudden money evaporating with every downturn of the stock market.
So, where are people now putting their money for investments? Real estate! Real estate has been a time-tested vehicle for short and long-term wealth and income and that was LONG before the .com and tech stock busts. Ok, probably nothing you don't know and haven't heard of right? So, now that we probably all know the actual and potential income for the average "Joe" through real estate the question is always "how do I get there?".
There are so many, many ways to profit in real estate and I'm never surprised from all those I meet at my speaking engagements as well as online students who make BIG money in real estate. I personally take notes on about successful characteristics of some that I would like to share with you:
* Average time is about two years to transition from corporate jobs to fulltime real estate investor.
* Both spouses contribute in some way to the real estate business.
* Investor possesses more than one profit-centered technique to make money in real estate. (wholesaling, landlording, etc...)
* Keeps accurate and ethical financial records.
* Live within their means on a personal financial level.
* Commits to a continued investment in their real estate education.
* One or both spouses have at one time or another been "downsized" being caught in corporate America crosshairs.
* Primary reason for investing in real estate is to have more time to spend with family and take control of their financial future.
* Feel that you DO NOT have to possess credit or money to make money in real estate.
* DESIRE to succeed…probably greatest succeed along with that positive attitude and don't listen to the naysayers.
In fact I had one student tell me their former manager in their corporate world stated that, "real estate investing is only for a tax write off". I'm not going to cast my pearls before swine and neither am I going to try to lead a horse to water that doesn't want to drink. Bottom-line is that this that now full-time real estate investor makes 2-3 times as much as the corporate executive.
With some of the general traits I've shared with you for fellow full-time real estate investors along with the absolute need for you to take control of your financial destiny means I've saved the biggest trait for last. Probably for many of you this may not be earth-shattering but the truth is that they all have a bona-fide marketing program fit to their budget, experience, short-term and long-term goals in real estate, coinciding with their profit-centered techniques.
Many stockbrokers make their living in speculating on undervalued stock and buying them in bulk. Corporate purchasing department executives will have their income tied into being able to make large gross profit buys on items their company may retail. Its all called the art of a deal and it simply doesn't matter which industry one is focused in when you're talking about moving a commodity its about being able to buy (and/or control) at the lowest price and sell at highest price possible. Difference in the middle is called a profit and is our motto in real estate: FIND A GREAT DEAL!!!
You may know 1002 creative ways to purchase and/or control properties but if its not a truly great deal to begin with then you only have a burden. So in having a system that locates truly motivated sellers to contact you on a consistent basis is what our whole business is about. It all starts with marketing and an investment that you feel comfortable with.
If you're not satisfied with the returns on your investment and you're in real estate or considering to be aggressive in real estate, then divert those funds into launching your own marketing IPO! Being able to control your own financial destiny if you're a competent real estate investor will result in what many of us already know….marketing is the best return on your investment!!
Good hunting as luck has absolutely nothing to do with it.
Monday, March 30, 2009
Marketing - The Weekend Bandit
As most of you already know, marketing is the key to succeeding in this business. We have to market to buy and sell homes. Those who are best at marketing to buy a house, have a lot less work to do when it comes to selling their homes because buying right is 90% of the battle. You don’t need to be flashy, you don’t need to be an expert, you just need to be out there. It is pretty much common knowledge among most successful investors that “bandit signs” really work. You know the little signs attached to telephone poles or stuck on the side of the road that say “We Buy Houses”. They are one of the most effective forms of marketing that you can do and one of the cheapest.
But many of us have an ethical dilemma when it comes to bandit signs. They are illegal to use in most areas of the country. I can relate the concerns of you all because I have the same ones. As a result, I haven’t been putting out bandit signs because I don’t want to break the law. Some investors have decided to chance it and are willing to pay the fines because the rewards are so great. But there is a way.
First, I put bandit signs in the yards of all of my properties. If I control 10 properties at a time, I can get my signs out into all of those yards. I’m not always getting the best locations, but believe it or not, this works. I get calls from within the neighborhoods and, to tell you the truth, this may be the most effective place I’ve ever placed signs. They don’t get torn down and removed when they are in my yard. You can also consider asking friends and family to allow you to put your sign in their yard, or even pay someone to allow you to keep your sign in their yard if they have a high exposure location. Perhaps you can offer to keep the debris in the street clean in exchange for having your sign in their yard on the corner.
But more importantly, for those of you who want to plaster your signs all around town, there is a way to do so without having the sign police chasing after you. In most jurisdictions across the country, there is an unwritten rule that you can put signs out on the weekends. You can put them out Friday evening (after the sign police are off for the weekend) and take them back up by Monday morning (before the sign police come back to work).
New home builders use this technique everywhere, all the time. There are companies that have formed businesses around this. They go out Friday evening and put signs out all over town for the new home developments that are going up. When you see clusters for about 12 builders all in one spot at an intersection, chances are that one person put up the signs for all 12 of those builders. As an investor on a limited budget, you could put up your own signs on Friday evenings, and then take them up on Sunday. Of if you have the extra money to spend, track down one of the guys who is putting out the signs for the new home builders, and ask them to put your signs out as well.
But many of us have an ethical dilemma when it comes to bandit signs. They are illegal to use in most areas of the country. I can relate the concerns of you all because I have the same ones. As a result, I haven’t been putting out bandit signs because I don’t want to break the law. Some investors have decided to chance it and are willing to pay the fines because the rewards are so great. But there is a way.
First, I put bandit signs in the yards of all of my properties. If I control 10 properties at a time, I can get my signs out into all of those yards. I’m not always getting the best locations, but believe it or not, this works. I get calls from within the neighborhoods and, to tell you the truth, this may be the most effective place I’ve ever placed signs. They don’t get torn down and removed when they are in my yard. You can also consider asking friends and family to allow you to put your sign in their yard, or even pay someone to allow you to keep your sign in their yard if they have a high exposure location. Perhaps you can offer to keep the debris in the street clean in exchange for having your sign in their yard on the corner.
But more importantly, for those of you who want to plaster your signs all around town, there is a way to do so without having the sign police chasing after you. In most jurisdictions across the country, there is an unwritten rule that you can put signs out on the weekends. You can put them out Friday evening (after the sign police are off for the weekend) and take them back up by Monday morning (before the sign police come back to work).
New home builders use this technique everywhere, all the time. There are companies that have formed businesses around this. They go out Friday evening and put signs out all over town for the new home developments that are going up. When you see clusters for about 12 builders all in one spot at an intersection, chances are that one person put up the signs for all 12 of those builders. As an investor on a limited budget, you could put up your own signs on Friday evenings, and then take them up on Sunday. Of if you have the extra money to spend, track down one of the guys who is putting out the signs for the new home builders, and ask them to put your signs out as well.
Increasing Your Marketing ROI
ROI, or “Return On Investment,” is a key financial measurement that correlates the cost of business expenditures to their actual value in the “real world.” Generally, ROI is expressed as a percentage, or the ratio of net benefits over costs. This is a common formula for Return On Investment:
ROI = [(Documented Monetary Benefit - Cost of Marketing) / Cost of Marketing] x 100
Let’s look at a simple example. Let’s assume a six-month marketing campaign cost $2,000.00, but resulted in $8,000.00 in profit. $8,000.00 - $2,000.00 = $6,000.00. $6,000.00 divided by $2,000.00 is 3, which calculates to a 300% ROI after multiplying it by 100.
The lower the cost and the higher the benefits, the larger your ROI percentage will be, which – all else being equal – is better of course. Enough with the math! The most important thing for every business owner – from a one-person LLC to the board of directors for a monster corporation – is maximum return for every dollar invested in marketing.
Here are the best ways to ensure that your advertising, marketing, and sales techniques are giving you the best “bang for the buck.” After all, you are in business to make money, right?
Plan and Consider Carefully for Best Marketing Results (Be Smart!)
Perhaps you already know that in order to achieve success, you must have both a direction and a way to get there. Business planning is as important as conducting business. But, many business owners do neglect to sit down and create an action plan for making the most out of their efforts. And even more do write out a plan, but not one specific enough. Or they don’t follow through or hold themselves accountable to it.
"S.M.A.R.T." stands for Specific, Measurable, Actionable, Realistic, and Timely. These are descriptors for any targets that you set for your marketing efforts. Meeting just one or two of these requirements isn’t tough. But making sure your proposed benchmarks meet all five terms of “SMART” goal setting is a little more involved. In other words, it’s not much use to say “I will raise net revenue by 20%” if you don’t have any vision on how you will achieve this, how long it should take to meet this mark, or if your company is currently having trouble making a profit. Also, there’s no “F” in “smart,” but if there was, it should stand for “Flexible.” The business world moves fast, and you must be quick on your feet to keep up. There’s no point in sticking to outdated business plans if you’re faced with new information that necessitates a change in direction. Don’t be afraid to modify your path along the way if all signs point to the fact that it’s the best course of action.
Consider Migrating to Lower-Cost Advertisement Formats
If you’re looking to boost your income while keeping your marketing costs constant, it makes sense to explore options with cheaper forms of marketing. Are you currently putting a lot of money into a yellow pages ad, radio spot, or newspaper print ads? There’s a chance that you might be able to find a better way to bring customers to you.
Big yellow page ads work well for certain types of “gotta find someone now” businesses, such as plumbers, lawyers or car repair shops. It isn’t necessarily the best way to attract new customers for other types of businesses. Moving the costs of a phone directory listing to an unconventional advertising method could make a noticeable improvement in your bottom line (see tip #8 below). The cost of large print ads in newspapers or other periodicals really adds up over time. Explore the advertising rates of competing publications. You might even be able to negotiate a better price with your existing ad agent if you know that the rates of another paper with similar circulation and demographics are lower.
If you’re currently mailing out flyers, letters, or other complex advertising pieces, consider switching to postcards. Postcards have lower postage rates and have a surprisingly high readership (there’s no effort involved with opening an envelope, and the small size keeps the message short and sweet). Post cards can be extremely effective to promote new products or specials, offer discounts or coupons, generate website traffic and new leads, or send a follow up message to an existing customer.
Make Sure Your CTA is the Best It Can Be
This is especially important for direct mail, print ads, or online advertising, but the concept is critical for all forms of marketing. The CTA – “call to action” – is arguably the most critical part of your marketing pitch, because this is what actually directs your potential customer to take the intended action – whatever that may be. A poorly thought-out or poorly worded CTA can actually turn off your customer and “lose them,” even if the rest of your advertising piece is successful. Identify with your customers and their mindset when they’re thinking about committing. Write the CTA so that what you’re telling them to do is the most appropriate and logical response to the problem your product addresses. Be the voice inside their head. Make sure the CTA is clear and action-oriented! This is the worst possible time to confuse your customers and raise questions in their minds – or give them the impression that it’s OK to “sleep on it.” Also, make sure it is easy to follow your recommended course of action. If you’re telling them to “call or go online now to reserve your seat,” make sure the phone number and website address is right there.
Improve Your Print Copy
It should be obvious that any marketing materials should be clear, powerful, and 100% free from typos and grammatical errors. Yes, details do matter. Judging by the technical problems found in many small business’ websites and advertising materials, many businesses apparently still haven’t realized this. Don’t just use an electronic spell check – many word substitutions won’t be caught (such as using “your” instead of “you’re”). After you’ve checked it yourself repeatedly and think it’s perfect, run it past some friends and family and tell them you’ll give them a dollar for every legitimate error they find. That will give them some real incentive! Your copy has to do more than just “sell” by hyping features and benefits. In fact, leading off with a headline that touts how amazing and wonderful your product is might have the opposite effect and instantly turn off the reader. If you use a headline or sub-headline, remember that the purpose is only to grab the reader’s attention and compel him to keep reading – not to deliver information.
Once you have succeeded to at least getting your potential client to continue scanning your text, the following copy must make some kind of emotional connection with your prospect. Otherwise, the customer’s sales resistance stays up, and so do the odds that your message is headed to the garbage can soon. You might consider starting off with a story or anecdote that seems to have nothing to do with what you’re pitching. An involving story (one with people or animals in it) sucks your reader in and makes him forget that he’s reading an advertisement. It also plays to the most powerful part of the consumer decision-making part of the brain – the emotional part (see # 6). Make sure whatever you’ve written isn’t too long. Again, try it out on acquaintances and get their input. Ask them how it makes them feel, or if they got bored or easily distracted while reading it. Ask them if they came up with any objections to performing the call to action. What do they think about the company behind the ad after reading your piece?
Perform More Follow-up on Every “Live” Lead
In a perfect world, everyone who received your marketing message would immediately respond and become a loyal customer for life. In reality, this isn’t the case. A certain percentage of those who get your “pitch” will ignore it or never follow through on the call to action. Depending on your advertising method and your product, it might be the large majority of your target market. So, it stands to reason that those who do make the call, visit, or click to get more information or the free introductory offer should be regarded as a great potential source of income. Don’t make the mistake of letting a qualified lead go to waste. Polite and personalized follow-ups after a prospect contacts you can win a prospective client over and prevent losing their business to a competitor.
Focus Your Efforts on Understanding and Targeting the Emotional Reasons that Drive Your Customers
We’d all like to think of ourselves as highly rational and intelligent beings. But . . . the fact remains that it’s our emotional side that often spurs us into action. Design your marketing to invoke your target customer’s emotions. Firing up feelings of desire, curiosity, hope, fear, surprise, respect, humor, or even anger can make your message (or what you want them to do - #3 from above) that much more powerful and memorable. Rational arguments will help your prospect to convince himself that all of your information is logical and reasonable. It will help him to remain convinced that he made the right decision after the sale is made. But the triggers that keep a person reading before they’re “sold” and compel the reader towards the purchase decision are almost always emotional.
The best thing is to paint a picture your customers can completely empathize with, voices their true desires for them, and allows them to completely realize their frustration or dissatisfaction with their current situation. Then make the offer of the perfect solution – but only after those pre-conditions are satisfied. When you correctly identify the driving emotions behind your customers’ decision-making process, you’ll convert more prospects to clients. Even better, you’ll also build a stronger perceived value for your service or product, which means you’ll be able to convert more customers at a higher price, or rely less on discounting to close sales.
Follow Industry Trends and Monitor the Competition
There’s nothing wrong with keeping up with what other businesses in your field are up to. In fact, it’s part of your job as a smart businessperson! Always monitor your competitors’ advertising, and check out their stores and product selection. If you don’t have time or the inclination, you can pay for the information by hiring a competitive intelligence (CI) firm to find out for you. By learning about your direct competition and researching the history and past actions of its management, you will be more likely to anticipate their next move. You can even take cues from companies in other industries or large corporations that aren’t your competition. Changes in the big market caused by trends such as rising oil prices, the ever-expanding online markets, or the spread of smoking bans across the country might mean something for you in your neck of the woods.
Consider Unconventional Marketing Techniques
There’s more you can do than print, direct mail, web, and phone directory advertising. Today, you can put your business name and contact information almost anywhere – on the back of a cab, on the side of a bus, on a bus station bench, in a restaurant bathroom. All of these could be a low-cost way to boost your return on investment figure. Don’t neglect to think outside of the box. Contemplate who your customers are, where they are, and what you could easily do to make a meaningful, positive impact.
Sponsor a local youth athletic league if your target market is composed of parents or baby boomers. Volunteer your services or products for a fundraiser raffle. Do an inexpensive “thank you” gift basket to remind your top repeat customers that you appreciate their patronage. If your business is a restaurant in a busy area dominated by offices and other businesses, bring a sample tray and menus to their locations – just before lunchtime. If your clients are typically web-savvy and a specialized niche, find the top online discussion forums or chat boards that focus on your topics relevant to your business. Find out what pay-per-click advertising on these websites might cost, or if you have more time than money, create an online user ID and participate in the discussion threads as a “resident expert.” Most online forums are free to join.
Just make sure your posts are informative, unbiased and impartial. Don’t openly advertise your business, but always include a link to your company website (or at least your business contact information) at the bottom of every post. Soon, the others on these forums – your ideal target customers – will recognize your expertise and flock to you, even though you never directly asked for their business.
Listen to Your Customers (or Customers you Lost)
Survey them for how they feel your representatives, your products and your services performed. Ask them how you can improve, or why they chose a competitor instead. Offer a discount coupon for future purchases or a chance to win a randomly selected prize (DO make good on the offer after you’ve completed your market study) as an incentive to bring in replies. You’ll need answers to specific questions in order to get good information out of your survey, such as “which of the following reasons was the biggest factor in choosing my company?” But, give your customers the opportunity to speak their minds without prompting as well. You should also ask this question:
“What product or service that I don’t currently offer would you be interested in?”
You just might discover a niche customer or product that could be your real “cash cow.”
Initiate, Revamp, or Improve Your Online Presence and Marketing
If you don’t have a website, you should. After all, if you’re reading this article, you must be fully aware of how you can find almost anything you’re seeking – information or products – via the Internet. Millions of others like you know this, and more and more people are realizing this truth every day.
Many businesses make the mistake of throwing up a website, and then doing nothing to keep it current or improve it. An outdated or unprofessional-looking website will scare away more customers than you imagine. Ideally, your website should provide anything your customer would like it to do – give more information, provide a variety of pictures of your products and services, and give them the means to contact you, easily find your physical location, or place an order online. Your website’s attractiveness, layout and ease of operation are critical as well. Internet customers are typically impatient. If they can’t figure out how to get what they want out of your website in the first ten seconds, the odds are good that they will move on, seeking what they could have purchased from you from another merchant.
Finally, optimizing your website’s content for search engine optimization can have a huge impact on your overall visibility on the World Wide Web. Do the research to find out how to do it yourself, or pay someone to do it for you. Either way, it will be well worth the time or money spent.
ROI = [(Documented Monetary Benefit - Cost of Marketing) / Cost of Marketing] x 100
Let’s look at a simple example. Let’s assume a six-month marketing campaign cost $2,000.00, but resulted in $8,000.00 in profit. $8,000.00 - $2,000.00 = $6,000.00. $6,000.00 divided by $2,000.00 is 3, which calculates to a 300% ROI after multiplying it by 100.
The lower the cost and the higher the benefits, the larger your ROI percentage will be, which – all else being equal – is better of course. Enough with the math! The most important thing for every business owner – from a one-person LLC to the board of directors for a monster corporation – is maximum return for every dollar invested in marketing.
Here are the best ways to ensure that your advertising, marketing, and sales techniques are giving you the best “bang for the buck.” After all, you are in business to make money, right?
Plan and Consider Carefully for Best Marketing Results (Be Smart!)
Perhaps you already know that in order to achieve success, you must have both a direction and a way to get there. Business planning is as important as conducting business. But, many business owners do neglect to sit down and create an action plan for making the most out of their efforts. And even more do write out a plan, but not one specific enough. Or they don’t follow through or hold themselves accountable to it.
"S.M.A.R.T." stands for Specific, Measurable, Actionable, Realistic, and Timely. These are descriptors for any targets that you set for your marketing efforts. Meeting just one or two of these requirements isn’t tough. But making sure your proposed benchmarks meet all five terms of “SMART” goal setting is a little more involved. In other words, it’s not much use to say “I will raise net revenue by 20%” if you don’t have any vision on how you will achieve this, how long it should take to meet this mark, or if your company is currently having trouble making a profit. Also, there’s no “F” in “smart,” but if there was, it should stand for “Flexible.” The business world moves fast, and you must be quick on your feet to keep up. There’s no point in sticking to outdated business plans if you’re faced with new information that necessitates a change in direction. Don’t be afraid to modify your path along the way if all signs point to the fact that it’s the best course of action.
Consider Migrating to Lower-Cost Advertisement Formats
If you’re looking to boost your income while keeping your marketing costs constant, it makes sense to explore options with cheaper forms of marketing. Are you currently putting a lot of money into a yellow pages ad, radio spot, or newspaper print ads? There’s a chance that you might be able to find a better way to bring customers to you.
Big yellow page ads work well for certain types of “gotta find someone now” businesses, such as plumbers, lawyers or car repair shops. It isn’t necessarily the best way to attract new customers for other types of businesses. Moving the costs of a phone directory listing to an unconventional advertising method could make a noticeable improvement in your bottom line (see tip #8 below). The cost of large print ads in newspapers or other periodicals really adds up over time. Explore the advertising rates of competing publications. You might even be able to negotiate a better price with your existing ad agent if you know that the rates of another paper with similar circulation and demographics are lower.
If you’re currently mailing out flyers, letters, or other complex advertising pieces, consider switching to postcards. Postcards have lower postage rates and have a surprisingly high readership (there’s no effort involved with opening an envelope, and the small size keeps the message short and sweet). Post cards can be extremely effective to promote new products or specials, offer discounts or coupons, generate website traffic and new leads, or send a follow up message to an existing customer.
Make Sure Your CTA is the Best It Can Be
This is especially important for direct mail, print ads, or online advertising, but the concept is critical for all forms of marketing. The CTA – “call to action” – is arguably the most critical part of your marketing pitch, because this is what actually directs your potential customer to take the intended action – whatever that may be. A poorly thought-out or poorly worded CTA can actually turn off your customer and “lose them,” even if the rest of your advertising piece is successful. Identify with your customers and their mindset when they’re thinking about committing. Write the CTA so that what you’re telling them to do is the most appropriate and logical response to the problem your product addresses. Be the voice inside their head. Make sure the CTA is clear and action-oriented! This is the worst possible time to confuse your customers and raise questions in their minds – or give them the impression that it’s OK to “sleep on it.” Also, make sure it is easy to follow your recommended course of action. If you’re telling them to “call or go online now to reserve your seat,” make sure the phone number and website address is right there.
Improve Your Print Copy
It should be obvious that any marketing materials should be clear, powerful, and 100% free from typos and grammatical errors. Yes, details do matter. Judging by the technical problems found in many small business’ websites and advertising materials, many businesses apparently still haven’t realized this. Don’t just use an electronic spell check – many word substitutions won’t be caught (such as using “your” instead of “you’re”). After you’ve checked it yourself repeatedly and think it’s perfect, run it past some friends and family and tell them you’ll give them a dollar for every legitimate error they find. That will give them some real incentive! Your copy has to do more than just “sell” by hyping features and benefits. In fact, leading off with a headline that touts how amazing and wonderful your product is might have the opposite effect and instantly turn off the reader. If you use a headline or sub-headline, remember that the purpose is only to grab the reader’s attention and compel him to keep reading – not to deliver information.
Once you have succeeded to at least getting your potential client to continue scanning your text, the following copy must make some kind of emotional connection with your prospect. Otherwise, the customer’s sales resistance stays up, and so do the odds that your message is headed to the garbage can soon. You might consider starting off with a story or anecdote that seems to have nothing to do with what you’re pitching. An involving story (one with people or animals in it) sucks your reader in and makes him forget that he’s reading an advertisement. It also plays to the most powerful part of the consumer decision-making part of the brain – the emotional part (see # 6). Make sure whatever you’ve written isn’t too long. Again, try it out on acquaintances and get their input. Ask them how it makes them feel, or if they got bored or easily distracted while reading it. Ask them if they came up with any objections to performing the call to action. What do they think about the company behind the ad after reading your piece?
Perform More Follow-up on Every “Live” Lead
In a perfect world, everyone who received your marketing message would immediately respond and become a loyal customer for life. In reality, this isn’t the case. A certain percentage of those who get your “pitch” will ignore it or never follow through on the call to action. Depending on your advertising method and your product, it might be the large majority of your target market. So, it stands to reason that those who do make the call, visit, or click to get more information or the free introductory offer should be regarded as a great potential source of income. Don’t make the mistake of letting a qualified lead go to waste. Polite and personalized follow-ups after a prospect contacts you can win a prospective client over and prevent losing their business to a competitor.
Focus Your Efforts on Understanding and Targeting the Emotional Reasons that Drive Your Customers
We’d all like to think of ourselves as highly rational and intelligent beings. But . . . the fact remains that it’s our emotional side that often spurs us into action. Design your marketing to invoke your target customer’s emotions. Firing up feelings of desire, curiosity, hope, fear, surprise, respect, humor, or even anger can make your message (or what you want them to do - #3 from above) that much more powerful and memorable. Rational arguments will help your prospect to convince himself that all of your information is logical and reasonable. It will help him to remain convinced that he made the right decision after the sale is made. But the triggers that keep a person reading before they’re “sold” and compel the reader towards the purchase decision are almost always emotional.
The best thing is to paint a picture your customers can completely empathize with, voices their true desires for them, and allows them to completely realize their frustration or dissatisfaction with their current situation. Then make the offer of the perfect solution – but only after those pre-conditions are satisfied. When you correctly identify the driving emotions behind your customers’ decision-making process, you’ll convert more prospects to clients. Even better, you’ll also build a stronger perceived value for your service or product, which means you’ll be able to convert more customers at a higher price, or rely less on discounting to close sales.
Follow Industry Trends and Monitor the Competition
There’s nothing wrong with keeping up with what other businesses in your field are up to. In fact, it’s part of your job as a smart businessperson! Always monitor your competitors’ advertising, and check out their stores and product selection. If you don’t have time or the inclination, you can pay for the information by hiring a competitive intelligence (CI) firm to find out for you. By learning about your direct competition and researching the history and past actions of its management, you will be more likely to anticipate their next move. You can even take cues from companies in other industries or large corporations that aren’t your competition. Changes in the big market caused by trends such as rising oil prices, the ever-expanding online markets, or the spread of smoking bans across the country might mean something for you in your neck of the woods.
Consider Unconventional Marketing Techniques
There’s more you can do than print, direct mail, web, and phone directory advertising. Today, you can put your business name and contact information almost anywhere – on the back of a cab, on the side of a bus, on a bus station bench, in a restaurant bathroom. All of these could be a low-cost way to boost your return on investment figure. Don’t neglect to think outside of the box. Contemplate who your customers are, where they are, and what you could easily do to make a meaningful, positive impact.
Sponsor a local youth athletic league if your target market is composed of parents or baby boomers. Volunteer your services or products for a fundraiser raffle. Do an inexpensive “thank you” gift basket to remind your top repeat customers that you appreciate their patronage. If your business is a restaurant in a busy area dominated by offices and other businesses, bring a sample tray and menus to their locations – just before lunchtime. If your clients are typically web-savvy and a specialized niche, find the top online discussion forums or chat boards that focus on your topics relevant to your business. Find out what pay-per-click advertising on these websites might cost, or if you have more time than money, create an online user ID and participate in the discussion threads as a “resident expert.” Most online forums are free to join.
Just make sure your posts are informative, unbiased and impartial. Don’t openly advertise your business, but always include a link to your company website (or at least your business contact information) at the bottom of every post. Soon, the others on these forums – your ideal target customers – will recognize your expertise and flock to you, even though you never directly asked for their business.
Listen to Your Customers (or Customers you Lost)
Survey them for how they feel your representatives, your products and your services performed. Ask them how you can improve, or why they chose a competitor instead. Offer a discount coupon for future purchases or a chance to win a randomly selected prize (DO make good on the offer after you’ve completed your market study) as an incentive to bring in replies. You’ll need answers to specific questions in order to get good information out of your survey, such as “which of the following reasons was the biggest factor in choosing my company?” But, give your customers the opportunity to speak their minds without prompting as well. You should also ask this question:
“What product or service that I don’t currently offer would you be interested in?”
You just might discover a niche customer or product that could be your real “cash cow.”
Initiate, Revamp, or Improve Your Online Presence and Marketing
If you don’t have a website, you should. After all, if you’re reading this article, you must be fully aware of how you can find almost anything you’re seeking – information or products – via the Internet. Millions of others like you know this, and more and more people are realizing this truth every day.
Many businesses make the mistake of throwing up a website, and then doing nothing to keep it current or improve it. An outdated or unprofessional-looking website will scare away more customers than you imagine. Ideally, your website should provide anything your customer would like it to do – give more information, provide a variety of pictures of your products and services, and give them the means to contact you, easily find your physical location, or place an order online. Your website’s attractiveness, layout and ease of operation are critical as well. Internet customers are typically impatient. If they can’t figure out how to get what they want out of your website in the first ten seconds, the odds are good that they will move on, seeking what they could have purchased from you from another merchant.
Finally, optimizing your website’s content for search engine optimization can have a huge impact on your overall visibility on the World Wide Web. Do the research to find out how to do it yourself, or pay someone to do it for you. Either way, it will be well worth the time or money spent.
How To Write Killer Ad Copy That Attracts An Avalanche of Sellers
Here’s another short tip in my success series. I have always said that marketing is the cornerstone of your business. If there is one place that you really want to place your best efforts, it’s in your marketing. But the question I hear most often from my students is, “How do I write great ad copy?”
Writing great copy is a state of mind. It’s really just about you talking to your potential sellers about why they should contact you to buy their house. No one knows you like you know yourself. And no one can communicate who you are and what you have to offer better than you. It is best, therefore, if you write the ads yourself so the true you comes out – the one that the customers are going to meet in person when they call. Here are some tips that will help:
1. Determine what type of customer you’re trying to attract. What is their situation? What are their immediate wants (remember we always seek out what we want, not necessarily what we need? Put yourself in their shoes. What are they thinking?
2. Write down who you are. Why should someone call you? Are you a friendly person? Do you focus on service? Are you easy to talk to? Do you have a lot of experience?
3. Have a USP – Unique Selling Proposition. What makes you better than all of the rest? It can be that all your phone calls are answered by a real person. Or that you will always make an offer within 24 hours. Whatever it is that you do that makes you unique to the competition.
4. Compare the two lists and the USP. Write down some phrases that match what you have to offer with what they want. For instance, they’re intimidated to call and talk to anyone about their situation. They’re afraid of being judged. You feel that you are a nice person who is easy to talk to. A phrase you might use is: “If you’re looking for a down-to-earth person who will take the time to make you the best offer on your house, then call me now at _______.”
5. Since composing the copy is difficult for most people, consider just talking it out into a tape recorder. Just talk to your customers in everyday English. Tell them what you can do for them. Then re-play your recording and write it down.
6. After that, put it away. Come back a day or two later, and read what you wrote, and make revisions that make it a stronger message. You may want to repeat this step a few times.
7. Be confident and proud of what you have to offer, but don’t let it become cocky, and do not over promise. It is much better to under promise and over deliver.
8. Be excited when you record your message, and allow that excitement to come through in the writing. You want your target customers to feel that excitement, and know that you are the person to call.
9. Test. Test. Test. Don’t feel that you have to get your copy perfect before you can send it out. Test it. See what kind of results you get. Then make improvements, and test again. Keep which ever version pulled the best results. Then test again with a new message, always keeping the best one as your control piece.
If you feel that your advertising is not pulling the number of leads it should, you may have one of the following trouble spots with your marketing. Critique your marketing and see if any of these apply. Or ask someone you trust and respect to review your marketing and provide their feedback.
1. You are not working in a good farm area for your service.
2. Your message is not clear.
3. Your headline does not grab their attention.
4. You are not building credibility & rapport with the readers - Do you have testimonials?
5. You have not clearly communicated the WIIFM - What's In It For Me.
6. You have not made it easy for them to see your phone number to call.
7. You do not have a live person answering the phone and you are losing lead calls - most will not leave a message.
8. You have not differentiated yourself from the competition.
The key is just get started. The hardest word is the first one, after that, each one is much easier. Just follow these steps and you’ll write some killer copy.
Writing great copy is a state of mind. It’s really just about you talking to your potential sellers about why they should contact you to buy their house. No one knows you like you know yourself. And no one can communicate who you are and what you have to offer better than you. It is best, therefore, if you write the ads yourself so the true you comes out – the one that the customers are going to meet in person when they call. Here are some tips that will help:
1. Determine what type of customer you’re trying to attract. What is their situation? What are their immediate wants (remember we always seek out what we want, not necessarily what we need? Put yourself in their shoes. What are they thinking?
2. Write down who you are. Why should someone call you? Are you a friendly person? Do you focus on service? Are you easy to talk to? Do you have a lot of experience?
3. Have a USP – Unique Selling Proposition. What makes you better than all of the rest? It can be that all your phone calls are answered by a real person. Or that you will always make an offer within 24 hours. Whatever it is that you do that makes you unique to the competition.
4. Compare the two lists and the USP. Write down some phrases that match what you have to offer with what they want. For instance, they’re intimidated to call and talk to anyone about their situation. They’re afraid of being judged. You feel that you are a nice person who is easy to talk to. A phrase you might use is: “If you’re looking for a down-to-earth person who will take the time to make you the best offer on your house, then call me now at _______.”
5. Since composing the copy is difficult for most people, consider just talking it out into a tape recorder. Just talk to your customers in everyday English. Tell them what you can do for them. Then re-play your recording and write it down.
6. After that, put it away. Come back a day or two later, and read what you wrote, and make revisions that make it a stronger message. You may want to repeat this step a few times.
7. Be confident and proud of what you have to offer, but don’t let it become cocky, and do not over promise. It is much better to under promise and over deliver.
8. Be excited when you record your message, and allow that excitement to come through in the writing. You want your target customers to feel that excitement, and know that you are the person to call.
9. Test. Test. Test. Don’t feel that you have to get your copy perfect before you can send it out. Test it. See what kind of results you get. Then make improvements, and test again. Keep which ever version pulled the best results. Then test again with a new message, always keeping the best one as your control piece.
If you feel that your advertising is not pulling the number of leads it should, you may have one of the following trouble spots with your marketing. Critique your marketing and see if any of these apply. Or ask someone you trust and respect to review your marketing and provide their feedback.
1. You are not working in a good farm area for your service.
2. Your message is not clear.
3. Your headline does not grab their attention.
4. You are not building credibility & rapport with the readers - Do you have testimonials?
5. You have not clearly communicated the WIIFM - What's In It For Me.
6. You have not made it easy for them to see your phone number to call.
7. You do not have a live person answering the phone and you are losing lead calls - most will not leave a message.
8. You have not differentiated yourself from the competition.
The key is just get started. The hardest word is the first one, after that, each one is much easier. Just follow these steps and you’ll write some killer copy.
How To Use Internet, Wanted Ads, and Bird-Dogs for Rental Properties
In this article, you'll learn how to use inexpensive property search methods that don't require your physical presence in order to be effective, but which allow you to be at the right place at the right time by:
1. Using the Internet.
2. Placing classified property wanted ads in daily newspapers.
3. Mailing letters to owners of vacant properties.
4. Obtaining insider information on properties that aren't advertised from your
own spy network of paid informants, commonly known as bird-dogs.
5. Paying finder's fees to people who tell you about properties that you buy.
Develop an Aggressive Five-Pronged Property Search Plan
In order to beat your competitors to the most profitable properties in your local real estate market, you need to develop an aggressive property search plan that involves the following five property search methods:
1. The Internet.
2. Property Wanted ads.
3. Bird-dogs.
4. Finder's fees.
5. Direct mail.
Use a Property Wanted Web Page to Find Properties Online
First and foremost, use what I commonly refer to as the great equalizer--the Internet--to search online for small, mismanaged rental properties. The most efficient way I know to do this is by having a property wanted Web page on your Web site that uses URL forwarding for a property wanted domain name. If you already have an existing Web site online, for an annual fee of around $50, you can have your property wanted domain name forwarded to a specific Web page on your Web site.
For example, when you use URL forwarding, or domain redirection, you can link your property wanted domain name, directly to a property wanted Web page on your existing Web site. This way, you avoid the cost and aggravation of building an entirely new Web site for your property wanted domain name. As an example, my company, Home Equities Corp, owns the URL or domain name, www.rentalpropertywanted.com, which has URL forwarding to the Property Wanted Web page at www.homeequitiescorp.com.
This means that whenever the domain name, www.rentalpropertywanted.com is typed into a browser, the URL is automatically forwarded to the Home Equities Corp Web site, which is the destination domain.
Link Your Property Wanted Web Page to Other Web Sites
Also, link your property wanted Web page to other Web sites that you, or your friends and business associates own. For example, on my Web site www.floridalandlord.com, there's a Tampa Rental Property Wanted button that's linked to the Home Equities Corp Property Wanted Web page. By doing this, I'm placing an online property wanted ad right under the nose of all of the residential rental property owners in the Tampa Bay Area who visit www.floridalandlord.com and want to sell their property.
All they have to do is click on the Tampa Rental Property Wanted button and follow the instructions to submit their property for consideration.
Use Classified Property Wanted Ads to Find Properties
I've been pretty successful over the years using classified property wanted ads to find non-advertised properties to buy. Most people call me because they don't have the time, desire or money to market their properties themselves. Or they don't want the hassle of listing their property with a real estate broker. Sure, I've received more than my fair share of calls from flakes, loonies and other assorted crazies. But I've been willing to put up with the hassle and inconvenience because I've usually found the type of property that I was looking for.
How to Write a Classified Property Wanted Ad
When writing your classified property wanted ad, use as few words as possible to get your message across. Nowadays, most papers have a four-line minimum with each line consisting of no more than twenty-six characters. To keep your ad right at three lines, write it out on graph paper that comes already divided into small squares. This way, you won't have to waste time dilly-dallying around trying to layout your ad.
The Best Place to List Your Property Wanted Ad
To ensure you get the best possible response from your classified property wanted ad, place it in the classified real estate section under various headings such as:
1. Rental property wanted.
2. Income property wanted.
3. Investment property wanted.
4. Property wanted.
5. Real estate wanted.
When to Run Your Property Wanted Ad
When's the best time to run your classified property wanted ad? You'll have to experiment by running your ad on various days in order to find out what works best in your area. For example, in Tampa, when I run one of my property wanted ads, it's usually only in the Sunday edition of The Tampa Tribune. Why do I run my ad only on Sunday? Because I've found that I get pretty much the same response whether I run the same ad for thirty consecutive days or just on Sundays. Plus, I save a small fortune in advertising costs. The kind of response that you'll get from your classified property wanted ad depends upon four things:
1. How well your ad is written.
2. The classified heading under which it's placed.
3. The size of the paper's circulation.
4. What you say in your ad.
Test Run Your Property Wanted Ad to See Which Ad Pulls the Best Response
I highly recommend that you test run the same property wanted ad for four consecutive weeks, and then change or tweak the ad copy, and run it another four weeks to see what variation of the ad pulls the best response.
Use Bird-Dogs to Find Properties That Aren't Advertised
What's a bird-dog? It's usually someone who comes into frequent contact with problem property owners within a specific neighborhood or area, and is in a position to learn about non-advertised rental properties that are for sale there. These types of hidden properties are never formally advertised as being for sale; their availability is only made known by word-of-mouth. A neighbor, a relative, or an acquaintance may be the only one who knows of a property owner's willingness or need to sell a small rental property.
Once you recruit these type of people into your bird-dog spy network of paid informants, you'll be in a position to receive valuable insider information on non-advertised rental properties without the general public, your competitors, ever knowing of their availability.
How to Recruit Bird-Dogs into Your Spy Network of Paid Informants
The best way to find bird-dogs to join your spy network of paid informants is to tell everyone that you come into frequent contact with, that you're looking to buy small, residential rental properties, and that you're willing to pay your bird-dogs a finder's fee when you buy a property that they've told you about. Here's a listing of the type of people you want to recruit into your network as bird-dogs:
1. Mail carriers
2. Trash collectors
3. Doctors
4. Dentists
5. Employees
6. Fellow club members
7. Fellow church members
8. Door-to-door salespeople
9. Delivery truck drivers
10. Tradesmen
11. Repairmen
12. Business colleagues
13. Co-workers
14. Neighbors
15. Friends
16. Tenants
17. Taxicab drivers
18. Utility meter readers
Offer to Pay a Finder's Fee
The best way I've found to motivate people to contact me with valuable information on non-advertised rental properties, is to offer to pay a finder's fee to anyone who tells me about a property that I buy. For example, my standard finder's fee is $500 cash, payable on the day that I buy the property. Why $500? That's because $500 seems to be the figure that gets the attention of most people.
I use to offer $300, but since I've upped the ante to $500, I've more that doubled the number of leads I get monthly from people calling to tell me about small rental properties. The thing I like best about using finder's fees is that I only have to pay them when I buy a rental property. In the meantime, I've got the benefit of a lot of people looking for small rental properties for me without the cost of a weekly payroll.
Use the Internet to Advertise Your Finder Fee Online
On my real estate investment company's Web site, www.homeequitiescorp.com Property Wanted Web page, there's a $500 Cash Reward button that visitors can click on to learn about how they can earn a finder's fee of $500 in cash by simply contacting me with information that results in the purchase of a dirty, neglected, run-down two to twelve-unit residential rental property in the Tampa Bay Area. I also have my $500 cash reward printed on the backside of my business cards.
Four Reasons Why I Use Direct Mail to Contact Property Owners
Here are four very good reasons why I use direct mail to contact property owners:
1. Direct mail is easy to use. All I have to do is sit at my computer, point and click, hit a couple of keys and it'll crank out one of my standard letters to property owners that just needs to be signed, folded and inserted into an envelope. I use Microsoft Office Word 2003 that can merge names and addresses with letters. And, I use window envelopes so I don't have to fiddle around addressing them.
2. Direct mail is relatively cheap to use. I'm a penny pincher. Direct mail gives me the most bang for my buck. For example, I can mail out one hundred letters first class mail for right around $60. This includes the cost of letterheads, envelopes and postage, the whole shebang.
3. Direct mail is quick. I usually get responses from owners interested in selling within two weeks from the date I mailed the letters out.
4. Direct mail is effective. It allows me to make direct contact with owners of small, mismanaged rental properties without having to go through third parties such as real estate agents.
1. Using the Internet.
2. Placing classified property wanted ads in daily newspapers.
3. Mailing letters to owners of vacant properties.
4. Obtaining insider information on properties that aren't advertised from your
own spy network of paid informants, commonly known as bird-dogs.
5. Paying finder's fees to people who tell you about properties that you buy.
Develop an Aggressive Five-Pronged Property Search Plan
In order to beat your competitors to the most profitable properties in your local real estate market, you need to develop an aggressive property search plan that involves the following five property search methods:
1. The Internet.
2. Property Wanted ads.
3. Bird-dogs.
4. Finder's fees.
5. Direct mail.
Use a Property Wanted Web Page to Find Properties Online
First and foremost, use what I commonly refer to as the great equalizer--the Internet--to search online for small, mismanaged rental properties. The most efficient way I know to do this is by having a property wanted Web page on your Web site that uses URL forwarding for a property wanted domain name. If you already have an existing Web site online, for an annual fee of around $50, you can have your property wanted domain name forwarded to a specific Web page on your Web site.
For example, when you use URL forwarding, or domain redirection, you can link your property wanted domain name, directly to a property wanted Web page on your existing Web site. This way, you avoid the cost and aggravation of building an entirely new Web site for your property wanted domain name. As an example, my company, Home Equities Corp, owns the URL or domain name, www.rentalpropertywanted.com, which has URL forwarding to the Property Wanted Web page at www.homeequitiescorp.com.
This means that whenever the domain name, www.rentalpropertywanted.com is typed into a browser, the URL is automatically forwarded to the Home Equities Corp Web site, which is the destination domain.
Link Your Property Wanted Web Page to Other Web Sites
Also, link your property wanted Web page to other Web sites that you, or your friends and business associates own. For example, on my Web site www.floridalandlord.com, there's a Tampa Rental Property Wanted button that's linked to the Home Equities Corp Property Wanted Web page. By doing this, I'm placing an online property wanted ad right under the nose of all of the residential rental property owners in the Tampa Bay Area who visit www.floridalandlord.com and want to sell their property.
All they have to do is click on the Tampa Rental Property Wanted button and follow the instructions to submit their property for consideration.
Use Classified Property Wanted Ads to Find Properties
I've been pretty successful over the years using classified property wanted ads to find non-advertised properties to buy. Most people call me because they don't have the time, desire or money to market their properties themselves. Or they don't want the hassle of listing their property with a real estate broker. Sure, I've received more than my fair share of calls from flakes, loonies and other assorted crazies. But I've been willing to put up with the hassle and inconvenience because I've usually found the type of property that I was looking for.
How to Write a Classified Property Wanted Ad
When writing your classified property wanted ad, use as few words as possible to get your message across. Nowadays, most papers have a four-line minimum with each line consisting of no more than twenty-six characters. To keep your ad right at three lines, write it out on graph paper that comes already divided into small squares. This way, you won't have to waste time dilly-dallying around trying to layout your ad.
The Best Place to List Your Property Wanted Ad
To ensure you get the best possible response from your classified property wanted ad, place it in the classified real estate section under various headings such as:
1. Rental property wanted.
2. Income property wanted.
3. Investment property wanted.
4. Property wanted.
5. Real estate wanted.
When to Run Your Property Wanted Ad
When's the best time to run your classified property wanted ad? You'll have to experiment by running your ad on various days in order to find out what works best in your area. For example, in Tampa, when I run one of my property wanted ads, it's usually only in the Sunday edition of The Tampa Tribune. Why do I run my ad only on Sunday? Because I've found that I get pretty much the same response whether I run the same ad for thirty consecutive days or just on Sundays. Plus, I save a small fortune in advertising costs. The kind of response that you'll get from your classified property wanted ad depends upon four things:
1. How well your ad is written.
2. The classified heading under which it's placed.
3. The size of the paper's circulation.
4. What you say in your ad.
Test Run Your Property Wanted Ad to See Which Ad Pulls the Best Response
I highly recommend that you test run the same property wanted ad for four consecutive weeks, and then change or tweak the ad copy, and run it another four weeks to see what variation of the ad pulls the best response.
Use Bird-Dogs to Find Properties That Aren't Advertised
What's a bird-dog? It's usually someone who comes into frequent contact with problem property owners within a specific neighborhood or area, and is in a position to learn about non-advertised rental properties that are for sale there. These types of hidden properties are never formally advertised as being for sale; their availability is only made known by word-of-mouth. A neighbor, a relative, or an acquaintance may be the only one who knows of a property owner's willingness or need to sell a small rental property.
Once you recruit these type of people into your bird-dog spy network of paid informants, you'll be in a position to receive valuable insider information on non-advertised rental properties without the general public, your competitors, ever knowing of their availability.
How to Recruit Bird-Dogs into Your Spy Network of Paid Informants
The best way to find bird-dogs to join your spy network of paid informants is to tell everyone that you come into frequent contact with, that you're looking to buy small, residential rental properties, and that you're willing to pay your bird-dogs a finder's fee when you buy a property that they've told you about. Here's a listing of the type of people you want to recruit into your network as bird-dogs:
1. Mail carriers
2. Trash collectors
3. Doctors
4. Dentists
5. Employees
6. Fellow club members
7. Fellow church members
8. Door-to-door salespeople
9. Delivery truck drivers
10. Tradesmen
11. Repairmen
12. Business colleagues
13. Co-workers
14. Neighbors
15. Friends
16. Tenants
17. Taxicab drivers
18. Utility meter readers
Offer to Pay a Finder's Fee
The best way I've found to motivate people to contact me with valuable information on non-advertised rental properties, is to offer to pay a finder's fee to anyone who tells me about a property that I buy. For example, my standard finder's fee is $500 cash, payable on the day that I buy the property. Why $500? That's because $500 seems to be the figure that gets the attention of most people.
I use to offer $300, but since I've upped the ante to $500, I've more that doubled the number of leads I get monthly from people calling to tell me about small rental properties. The thing I like best about using finder's fees is that I only have to pay them when I buy a rental property. In the meantime, I've got the benefit of a lot of people looking for small rental properties for me without the cost of a weekly payroll.
Use the Internet to Advertise Your Finder Fee Online
On my real estate investment company's Web site, www.homeequitiescorp.com Property Wanted Web page, there's a $500 Cash Reward button that visitors can click on to learn about how they can earn a finder's fee of $500 in cash by simply contacting me with information that results in the purchase of a dirty, neglected, run-down two to twelve-unit residential rental property in the Tampa Bay Area. I also have my $500 cash reward printed on the backside of my business cards.
Four Reasons Why I Use Direct Mail to Contact Property Owners
Here are four very good reasons why I use direct mail to contact property owners:
1. Direct mail is easy to use. All I have to do is sit at my computer, point and click, hit a couple of keys and it'll crank out one of my standard letters to property owners that just needs to be signed, folded and inserted into an envelope. I use Microsoft Office Word 2003 that can merge names and addresses with letters. And, I use window envelopes so I don't have to fiddle around addressing them.
2. Direct mail is relatively cheap to use. I'm a penny pincher. Direct mail gives me the most bang for my buck. For example, I can mail out one hundred letters first class mail for right around $60. This includes the cost of letterheads, envelopes and postage, the whole shebang.
3. Direct mail is quick. I usually get responses from owners interested in selling within two weeks from the date I mailed the letters out.
4. Direct mail is effective. It allows me to make direct contact with owners of small, mismanaged rental properties without having to go through third parties such as real estate agents.
How to Mail Postcards for 12 Cents Each
You can deliver a mailing piece up to 3.3 ounces for between 11.6 and 12.9 cents each. You probably receive "junk mail" delivered at this rate. I get postcards, self-mailers, brochures, flyers, coupon books and local store catalogs on a regular basis delivered using the US postal service's Enhanced Carrier Route (ECR) rates.
As a real estate investor, you can get more sellers calling you and sell your houses fast using the lowest postage rates available. It works when you want to concentrate a mailing to all homes in a certain neighborhood or area.
We already mailed an oversized postcard to sell 6 of our houses and next week will deliver my famous "advertorial" to homeowners convincing them to call if they want to sell their house quickly and easily.
After showing other investors how to use this low cost, direct mail approach, I have figured out the best way for you to research it and use it yourself. Look in your phonebook under "mailing services." You'll also find print shops and letter shops that can help. Tell them you want to saturate several neighborhoods with a postcard. You want to use their "standard Mail" permit or you can get your own. The cost for your own is $125 to setup and $125 a year. But the mailing house may prefer or require you use theirs. That's good.
Tell the vendor you want to mail to all residents. This is also known as a SATURATION mailing. In some areas, instead of an address label, you can have POSTAL CUSTOMER or BOXHOLDER or RESIDENT preprinted on your postcard. In other areas you'll need to buy a RESIDENT LIST which includes all the addresses in a certain zip code or carrier route, but not names. We checked several sources for lists and were quoted 1 cent to 3 cents each. Do pay more than 1 cent each. If you can't get it locally then you can get it from a national company. In fact, it's possible to do the entire job (print, address and mail) with a national company.
If addresses are required, one source you can look into is www.melissadata.com. In fact, if you go to their site, you can get a count of the number of addresses and carrier routes for any zip code you enter. Their cost is about 1 cent each for online download, CD-ROM or labels.
The key postal term to mention is Enhanced Carrier Route Walk Sequence Saturation (ECRWSS). When prepared properly, the mail carrier will deliver one mail piece to each address on the route. That is a minimum requirement, all addresses on a route.
My next mailing will be to an entire zip code has 17 carrier routes, and about 8,000 addresses. If I wanted to I could further target my project to selected carrier routes only.
The cost on my last mailing was 11.6 cent postage each. To get that rate we delivered (to each respective post office) presorted stacks of cards, one for each carrier route with the number of cards needed for each route.
If you do not deliver the cards to each individual post office, then the rate is 12.1 or 12.6 cents. I have found that the easiest way to do it is to let the mailing houses do it all. Tell them what you want and let them figure it out. Get several bids.
I suggest you put your marketing message on a double-sided 4.25" x 8.5" (half sheet) postcard. That way your printing cost will only be 3 or 4 cents each. Use yellow or bright yellow card stock. Your "message" should be filled with reasons why they should respond...what's in it for them.
My first mailing was to a rural area so no labels were required. We just put POSTAL CUSTOMER below the permit imprint. That saved us from buying a list and addressing the cards. Our next mailing to a city area which requires addressing. A mailing to rural routes or postal box holders only should not require labels. Your local mailing house or letter shop should have experience with these types of mailings and can help you plan your campaign and design your postcard (i.e. the position of the permit and address info).
For more info you can search http://pe.usps.gov/ for "enhanced carrier route walk sequence saturation."
As a real estate investor, you can get more sellers calling you and sell your houses fast using the lowest postage rates available. It works when you want to concentrate a mailing to all homes in a certain neighborhood or area.
We already mailed an oversized postcard to sell 6 of our houses and next week will deliver my famous "advertorial" to homeowners convincing them to call if they want to sell their house quickly and easily.
After showing other investors how to use this low cost, direct mail approach, I have figured out the best way for you to research it and use it yourself. Look in your phonebook under "mailing services." You'll also find print shops and letter shops that can help. Tell them you want to saturate several neighborhoods with a postcard. You want to use their "standard Mail" permit or you can get your own. The cost for your own is $125 to setup and $125 a year. But the mailing house may prefer or require you use theirs. That's good.
Tell the vendor you want to mail to all residents. This is also known as a SATURATION mailing. In some areas, instead of an address label, you can have POSTAL CUSTOMER or BOXHOLDER or RESIDENT preprinted on your postcard. In other areas you'll need to buy a RESIDENT LIST which includes all the addresses in a certain zip code or carrier route, but not names. We checked several sources for lists and were quoted 1 cent to 3 cents each. Do pay more than 1 cent each. If you can't get it locally then you can get it from a national company. In fact, it's possible to do the entire job (print, address and mail) with a national company.
If addresses are required, one source you can look into is www.melissadata.com. In fact, if you go to their site, you can get a count of the number of addresses and carrier routes for any zip code you enter. Their cost is about 1 cent each for online download, CD-ROM or labels.
The key postal term to mention is Enhanced Carrier Route Walk Sequence Saturation (ECRWSS). When prepared properly, the mail carrier will deliver one mail piece to each address on the route. That is a minimum requirement, all addresses on a route.
My next mailing will be to an entire zip code has 17 carrier routes, and about 8,000 addresses. If I wanted to I could further target my project to selected carrier routes only.
The cost on my last mailing was 11.6 cent postage each. To get that rate we delivered (to each respective post office) presorted stacks of cards, one for each carrier route with the number of cards needed for each route.
If you do not deliver the cards to each individual post office, then the rate is 12.1 or 12.6 cents. I have found that the easiest way to do it is to let the mailing houses do it all. Tell them what you want and let them figure it out. Get several bids.
I suggest you put your marketing message on a double-sided 4.25" x 8.5" (half sheet) postcard. That way your printing cost will only be 3 or 4 cents each. Use yellow or bright yellow card stock. Your "message" should be filled with reasons why they should respond...what's in it for them.
My first mailing was to a rural area so no labels were required. We just put POSTAL CUSTOMER below the permit imprint. That saved us from buying a list and addressing the cards. Our next mailing to a city area which requires addressing. A mailing to rural routes or postal box holders only should not require labels. Your local mailing house or letter shop should have experience with these types of mailings and can help you plan your campaign and design your postcard (i.e. the position of the permit and address info).
For more info you can search http://pe.usps.gov/ for "enhanced carrier route walk sequence saturation."
How to Get Your Marketing Message Out All Year
I recently ordered my 2002 calendar greeting cards. Each year I mail them around Christmas time to most everyone on my contact list with a brief personal note and my $100 bill business card. What's great is people put them up and see them all year. Here's what I had imprinted on the bottom of them:
Bottom Line RESULT$, Inc. Sell Your House in 9 Days at a Fair Price! No fee.
No commission. Quick, easy and professional. FREE recorded info 24/7 at
1-888-499-1051 Box 5151 Bus: 719-687-4472 • Fax: 719-687-4471 • blresults@aol.com
I also recently ordered some high quality brass barrel pens from www.amsterdamprinting.com. Most people just imprint their name and phone number (boring!). They limited me to 5 lines of 45 characters each and I used just about every character:
SELL YOUR HOUSE IN 9 DAYS AT A FAIR PRICE! Local company needs
to buy 7 houses monthly. No fee/commission. Quick/easy/professional.
For FREE recorded info, call 1-888-499-1051 Box 5151, then call Martha at (719) 687-6885
I now give a pen to all new acquaintances including all prospective buyers and sellers. I also leave a handful at the title company, bank, or coffee shop each time I visit. They have a high perceived value (unlike cheap plastic pens) and tend to float around. They are valued at $3.79 and cost $1.79 in bulk. They are a great "lumpy mail" item to send with a sales letter to a qualified list of prospective sellers.
Amsterdam Printing has a matching brass barrel key tag that I will soon order and give to my new occupants. Also looking into custom "welcome mats" as a house warming gift. The cost can be justified with a well organized referral and follow up program. We are working on ours and will share it with you in a future issue.
You'll notice that my new advertising refers buyers and sellers to call Martha. Martha is an independent contractor. She works from her own home office. I forward one of my phone numbers to her office. After a buyer or seller goes through my voice mail system, they are invited to call Martha. She will complete a property information sheet on sellers and fax to my office for me to follow up. She will complete a buyer's information sheet on buyers and fax to our office for my sale manager Eric to follow up. She also she's an initial mail out to sellers. She adds both buyer and seller to a mailing list and emails a copy to us each week.
We were lucky to stumble across Martha. You can seek out your own "Martha" once you have the volume to justify it. A similar but different "answering and messaging" service designed for managing your buyers, check out www.BuyerMD.com.
Bottom Line RESULT$, Inc. Sell Your House in 9 Days at a Fair Price! No fee.
No commission. Quick, easy and professional. FREE recorded info 24/7 at
1-888-499-1051 Box 5151 Bus: 719-687-4472 • Fax: 719-687-4471 • blresults@aol.com
I also recently ordered some high quality brass barrel pens from www.amsterdamprinting.com. Most people just imprint their name and phone number (boring!). They limited me to 5 lines of 45 characters each and I used just about every character:
SELL YOUR HOUSE IN 9 DAYS AT A FAIR PRICE! Local company needs
to buy 7 houses monthly. No fee/commission. Quick/easy/professional.
For FREE recorded info, call 1-888-499-1051 Box 5151, then call Martha at (719) 687-6885
I now give a pen to all new acquaintances including all prospective buyers and sellers. I also leave a handful at the title company, bank, or coffee shop each time I visit. They have a high perceived value (unlike cheap plastic pens) and tend to float around. They are valued at $3.79 and cost $1.79 in bulk. They are a great "lumpy mail" item to send with a sales letter to a qualified list of prospective sellers.
Amsterdam Printing has a matching brass barrel key tag that I will soon order and give to my new occupants. Also looking into custom "welcome mats" as a house warming gift. The cost can be justified with a well organized referral and follow up program. We are working on ours and will share it with you in a future issue.
You'll notice that my new advertising refers buyers and sellers to call Martha. Martha is an independent contractor. She works from her own home office. I forward one of my phone numbers to her office. After a buyer or seller goes through my voice mail system, they are invited to call Martha. She will complete a property information sheet on sellers and fax to my office for me to follow up. She will complete a buyer's information sheet on buyers and fax to our office for my sale manager Eric to follow up. She also she's an initial mail out to sellers. She adds both buyer and seller to a mailing list and emails a copy to us each week.
We were lucky to stumble across Martha. You can seek out your own "Martha" once you have the volume to justify it. A similar but different "answering and messaging" service designed for managing your buyers, check out www.BuyerMD.com.
How to Dominate a Market with Low Cost Postcards
There are no magic bullets in marketing, but I have developed a system which comes pretty darn close. I reported in the last issue of this eLetter about my new postcard campaign. Here's an update:
I mailed 10,000 oversized postcards to one zip code. I saturated every home with my message. The total cost was less than $3,000. We received about 35 calls, only .35% response. But I bought 5 houses out of 35 leads on the first mailing! The response rate should remain the same or improve as I remail to the same neighborhoods, allowing them to see my message multiple times, giving my self increased credibility. Plus some the postcards will be saved, and I'll get more calls from this initial mailing down the road.
I bought one out of 7 houses for sell. I usually buy one out of 10 to 15. The increase in closing ratio, I believe, was a result of targeting the right neighborhoods and getting my entire sales message (my famous "advertorial") in their hand... and my new headline. These sellers were much more prescreened than if that called on a sign, classified ad or a regular smaller size postcard.
** $145,400 IN CASH AND EQUITY IN ONLY 6 WEEKS FOR $3,000 **
Here are the actual results:
House #1: This house valued at $134,900 fixed up. It needs carpet, paint and some trim items. Seller owed $89,000 plus $6,000 in back payments. I purchased for amount owed (subject to) plus $500, or $95,500. We have it under contract with a tenant/buyer for $132,000 "as is". We got our buyer in with the first month's rent, $3,500 non-refundable purchase plus some repairs to be done prior to occupancy. We have a positive cash flow. Equity gained: $35,500
House #2: Seller owed $106,000 plus several back payments. I bought for what the seller owed (subject to), about $109,000 with $3,000 down. The seller used the money down to get the loan current. House needed carpet, paint, sod in front yard, roof (unexpected.oops!) and some misc. repairs. The house did not sell quickly "as is" so we are fixing it up. It is offered for sale for $144,500 fixed up. The repair costs are $12,000. Because of roof, this is a tight deal on a fixer upper. Equity gained: $23,900
House #3: Seller owed $94,000 on a first, $10,000 on a second and $6,000 in arrears. We purchase for the $110,000 owed subject to. After repaired value is $159,500. It needs $15,000 in repairs. Currently being offered at the after fixed up price, "accepting offers as is". We made up the back payments and paid off second with cash generated from buying house #5 below. Has not sold as is yet so we are about to rehab. Equity gained: $34,500
House #4: This house is in great shape and valued at $157,500 with terms. We took over a nice $110,000 first mortgage subject to, put $2,000 down and the owner carried back $20,000 with no payments or interest, due in 5 years. We held a "round robin" open house for one hour and found a tenant buyer with $5,000 down plus the first month's rent. We had it cleaned and the carpet stretched. We also spent $500 fixing up the front yard. Because of the $20,000 (deferred down payment," we have a nice positive cash flow. Equity gained: $25,000
House #5: Valued at $165,000-$170,000. It is on the market for $179,500 with terms. My office may have sold it yesterday for $10,000 down to a tenant/buyer. House is in great shape, nice neighborhood. Owner bought for daughter and it had been vacant for 4 months without being marketed. He owed $18,000 on a first mortgage. I offered him $63,000 cash and $90,000 in 5 second mortgages secured by 5 different properties including his house, 3 of the houses above, and one of my "keeper" rental properties. Terms on his equity is 6% accumulated interest, no payments, 5 year call and the right to substitute collateral. He is a retired military officer and did not need income but wanted interest on his equity. I got a new hard money loan for $123,000 at 11% and walked away from the closing table with $60,000 cash(!) less closing costs. Equity gained: $26,500
Total equity gained on 5 houses: $145,400
Cost of mailing: $3,000
(Better than the stock market?)
The cost per deal for marketing is $600 per house, higher than my average $350. But I spoke to less sellers, saw less houses and can EASILY repeat as often as I want, anywhere in the country!
I mailed 10,000 oversized postcards to one zip code. I saturated every home with my message. The total cost was less than $3,000. We received about 35 calls, only .35% response. But I bought 5 houses out of 35 leads on the first mailing! The response rate should remain the same or improve as I remail to the same neighborhoods, allowing them to see my message multiple times, giving my self increased credibility. Plus some the postcards will be saved, and I'll get more calls from this initial mailing down the road.
I bought one out of 7 houses for sell. I usually buy one out of 10 to 15. The increase in closing ratio, I believe, was a result of targeting the right neighborhoods and getting my entire sales message (my famous "advertorial") in their hand... and my new headline. These sellers were much more prescreened than if that called on a sign, classified ad or a regular smaller size postcard.
** $145,400 IN CASH AND EQUITY IN ONLY 6 WEEKS FOR $3,000 **
Here are the actual results:
House #1: This house valued at $134,900 fixed up. It needs carpet, paint and some trim items. Seller owed $89,000 plus $6,000 in back payments. I purchased for amount owed (subject to) plus $500, or $95,500. We have it under contract with a tenant/buyer for $132,000 "as is". We got our buyer in with the first month's rent, $3,500 non-refundable purchase plus some repairs to be done prior to occupancy. We have a positive cash flow. Equity gained: $35,500
House #2: Seller owed $106,000 plus several back payments. I bought for what the seller owed (subject to), about $109,000 with $3,000 down. The seller used the money down to get the loan current. House needed carpet, paint, sod in front yard, roof (unexpected.oops!) and some misc. repairs. The house did not sell quickly "as is" so we are fixing it up. It is offered for sale for $144,500 fixed up. The repair costs are $12,000. Because of roof, this is a tight deal on a fixer upper. Equity gained: $23,900
House #3: Seller owed $94,000 on a first, $10,000 on a second and $6,000 in arrears. We purchase for the $110,000 owed subject to. After repaired value is $159,500. It needs $15,000 in repairs. Currently being offered at the after fixed up price, "accepting offers as is". We made up the back payments and paid off second with cash generated from buying house #5 below. Has not sold as is yet so we are about to rehab. Equity gained: $34,500
House #4: This house is in great shape and valued at $157,500 with terms. We took over a nice $110,000 first mortgage subject to, put $2,000 down and the owner carried back $20,000 with no payments or interest, due in 5 years. We held a "round robin" open house for one hour and found a tenant buyer with $5,000 down plus the first month's rent. We had it cleaned and the carpet stretched. We also spent $500 fixing up the front yard. Because of the $20,000 (deferred down payment," we have a nice positive cash flow. Equity gained: $25,000
House #5: Valued at $165,000-$170,000. It is on the market for $179,500 with terms. My office may have sold it yesterday for $10,000 down to a tenant/buyer. House is in great shape, nice neighborhood. Owner bought for daughter and it had been vacant for 4 months without being marketed. He owed $18,000 on a first mortgage. I offered him $63,000 cash and $90,000 in 5 second mortgages secured by 5 different properties including his house, 3 of the houses above, and one of my "keeper" rental properties. Terms on his equity is 6% accumulated interest, no payments, 5 year call and the right to substitute collateral. He is a retired military officer and did not need income but wanted interest on his equity. I got a new hard money loan for $123,000 at 11% and walked away from the closing table with $60,000 cash(!) less closing costs. Equity gained: $26,500
Total equity gained on 5 houses: $145,400
Cost of mailing: $3,000
(Better than the stock market?)
The cost per deal for marketing is $600 per house, higher than my average $350. But I spoke to less sellers, saw less houses and can EASILY repeat as often as I want, anywhere in the country!
Sunday, March 29, 2009
Get Comfortable With Your Direct Mail Houses
It is a lot of work getting your direct mail pieces out. What happens is that if you are trying to do everything yourself you finally get to a point that you don’t want to do it anymore. Mail houses are very inexpensive and here’s why. The United States Post Office offers a presort discount. If you will bundle the mail according to their specification and bundle it to the first three digits of the zip code USPS will give you an even better discount. If you will do all 5 digits of the zip code, they will give you the best discount. If you will do a zip plus 4 presort, in other words sorted all the way down to the carrier route, USPS will give you the best discount.
A mail house will sort it for you and apply that discount to your fee. What that means is if you are at home trying to do it yourself you will pay full postage. Not to mention the hours lost. The savings that you get from the postage will almost pay for the mail house. Let me give you an example and a resource. Alliance Productions, Inc., talk to Mike and tell him you are one of my students and he will give you special pricing. He will print up your postcard, presort, and charge you 24 cents for the preparation and 24 cents for the postage if you are using the half sheet postcard. The half sheet postcard is the best size because it stands out in the mail and it is big enough for you to get plenty of advertising copy on it. The post office is going to charge you regular first class postage as if it were a letter, currently 41 cents. With the presort discount the mailhouse is only going to charge you 24 cents. A 17 cents savings that is then applied to the production of the piece. You are saving 17 so each piece is only costing you 7 cents.
When I say that he is doing the production that means that he is doing all the card stock to go out, the cutting of it, the ink to go on it, because if you do this at home you are going to spend an awful lot of money on ink in your printer. And then he applies the stamp and takes it to the post office, all of the production for 7 cents each. It is well worth it. There is no way that you can do it for that price at home. If you are interested in doing direct mail call him.
You can use a mail house near you as well. I did a lot of research and found him to be one of the cheapest and he understands our business. You can send him a download of the addresses you want it to go to, send him a download of the marketing copy you want and he will merge those two together and create the postcard, print it up, bundle it, get the presort, and take it to the post office.
Mail houses are a much easier way to get your marketing out the door. Let other people do it. Outsource it so that you have more time to put into your business. All you have to do is send him your addresses, send him your marketing file and you are done. That marketing piece is done and off your books. In fact, you can get so good you have five different pieces that you normally send out. You can give all of those to him in advance. Send those to him and say this is mailing one on such and such date, mailing two on such and such date, etc. This is how you want to set up your business so that you are not being consumed by all the individual tasks. Your focus should be on getting more sellers in, negotiating with them, negotiating with buyers and answering the calls that come in from your marketing. That’s where you are going to make your money.
A mail house will sort it for you and apply that discount to your fee. What that means is if you are at home trying to do it yourself you will pay full postage. Not to mention the hours lost. The savings that you get from the postage will almost pay for the mail house. Let me give you an example and a resource. Alliance Productions, Inc., talk to Mike and tell him you are one of my students and he will give you special pricing. He will print up your postcard, presort, and charge you 24 cents for the preparation and 24 cents for the postage if you are using the half sheet postcard. The half sheet postcard is the best size because it stands out in the mail and it is big enough for you to get plenty of advertising copy on it. The post office is going to charge you regular first class postage as if it were a letter, currently 41 cents. With the presort discount the mailhouse is only going to charge you 24 cents. A 17 cents savings that is then applied to the production of the piece. You are saving 17 so each piece is only costing you 7 cents.
When I say that he is doing the production that means that he is doing all the card stock to go out, the cutting of it, the ink to go on it, because if you do this at home you are going to spend an awful lot of money on ink in your printer. And then he applies the stamp and takes it to the post office, all of the production for 7 cents each. It is well worth it. There is no way that you can do it for that price at home. If you are interested in doing direct mail call him.
You can use a mail house near you as well. I did a lot of research and found him to be one of the cheapest and he understands our business. You can send him a download of the addresses you want it to go to, send him a download of the marketing copy you want and he will merge those two together and create the postcard, print it up, bundle it, get the presort, and take it to the post office.
Mail houses are a much easier way to get your marketing out the door. Let other people do it. Outsource it so that you have more time to put into your business. All you have to do is send him your addresses, send him your marketing file and you are done. That marketing piece is done and off your books. In fact, you can get so good you have five different pieces that you normally send out. You can give all of those to him in advance. Send those to him and say this is mailing one on such and such date, mailing two on such and such date, etc. This is how you want to set up your business so that you are not being consumed by all the individual tasks. Your focus should be on getting more sellers in, negotiating with them, negotiating with buyers and answering the calls that come in from your marketing. That’s where you are going to make your money.
Free Corvette With Purchase!
I used ‘U-Haul' money to purchase a really great house ‘Subject To'. It was 4bd, 3ba, 3 car garage, 2 fireplaces, tile roof, 1/3 acre lot house and only one year new. I guess the buzzword is it was a ‘Pretty House'. However as with any house I only give the seller a small sum for their equity, then it is ‘Gorgeous' to me forget about ‘Pretty'.
The time period was December a few years ago. Those that remember it was very slow for home sales. It was the 15th of the month close to Christmas and I had only bought and sold 4 or 5 properties. The home was advertised for $15K down in the local paper. No calls were coming in; the Grinch was staring me right in the face and laughing. It looked like Santa wasn't coming this year. I called a friend of mine in the used car business and asked him if he had any "sexy" used cars for a good price. He said he had an '84' Corvette in super condition. This was a bad year for Corvettes so it kept the price down, but fit right in to my plans. It was a decent car but not in super condition. You know how those used car salesman are even if they are friends. I purchased the ‘vette' for $3,400.00.
My New Ad Read:
$20K down – No Qualifying
4bd, 3ba, 2800sq.ft., 3 car gar.
1 year new, close to shopping,etc.
FREE CORVETTE W/Purchase
Call owner 555-1212
You noticed I added $5K to the down payment to cover the cost of the car plus a little extra for Christmas shopping. When the ad broke in the newspaper the phone did not stop ringing, one call after the other. I sold the home the same day the ad came out and probably could have sold a dozen more, if I had them.
Every house we buy has a personality of its own, much like you and I. This home looked like it was built for a Corvette owner. If the buyer did not own one he would when he bought the home. There are basic amenities plus copy I place in my ads. However, I use marketing techniques using the personality of the house to match the personality of my potential buyer.
You can get top dollar for the home you have advertised if you use the proper ad copy. Be creative in your marketing efforts. I am not saying to go out and buy a car for every home you sell. But, I am a firm believer that the home sells itself. Just envision who would buy the home, then be creative in your ad so that it fits the person or family reading the ad.
The time period was December a few years ago. Those that remember it was very slow for home sales. It was the 15th of the month close to Christmas and I had only bought and sold 4 or 5 properties. The home was advertised for $15K down in the local paper. No calls were coming in; the Grinch was staring me right in the face and laughing. It looked like Santa wasn't coming this year. I called a friend of mine in the used car business and asked him if he had any "sexy" used cars for a good price. He said he had an '84' Corvette in super condition. This was a bad year for Corvettes so it kept the price down, but fit right in to my plans. It was a decent car but not in super condition. You know how those used car salesman are even if they are friends. I purchased the ‘vette' for $3,400.00.
My New Ad Read:
$20K down – No Qualifying
4bd, 3ba, 2800sq.ft., 3 car gar.
1 year new, close to shopping,etc.
FREE CORVETTE W/Purchase
Call owner 555-1212
You noticed I added $5K to the down payment to cover the cost of the car plus a little extra for Christmas shopping. When the ad broke in the newspaper the phone did not stop ringing, one call after the other. I sold the home the same day the ad came out and probably could have sold a dozen more, if I had them.
Every house we buy has a personality of its own, much like you and I. This home looked like it was built for a Corvette owner. If the buyer did not own one he would when he bought the home. There are basic amenities plus copy I place in my ads. However, I use marketing techniques using the personality of the house to match the personality of my potential buyer.
You can get top dollar for the home you have advertised if you use the proper ad copy. Be creative in your marketing efforts. I am not saying to go out and buy a car for every home you sell. But, I am a firm believer that the home sells itself. Just envision who would buy the home, then be creative in your ad so that it fits the person or family reading the ad.
Five Ways to Profit from Every Meeting with a Seller
You can make a profit from the deals you find, even when the deals aren't a fit for your real estate business. Here are five tips to make sure you get paid for your time.
1. Sign Up the Deal!
This is the most obvious way to profit from every appointment you make.
2. Turn Your "Junk" Into Gold
Take the people you meet who just are not a fit for you and refer them to people in your network who can profit by the referral. This builds value into your referral network. For example: You meet with a seller who really would do better to refinance the house. You simply say, "I can see it's not a fit for me to buy this house. Your best option really is for you to refinance the property. Here's the number of a great mortgage broker I know [give him the number], and if I remember, I'll ask her to give you a call next week to see if she can help out." Then pass the seller's name and phone number on to your mortgage broker. Over time this will encourage your mortgage broker contact to pass leads to you, such as buyers whose loan fell through. There is a motivated seller now!
3. Get Information on Local Market Conditions
Use the meeting to get information for the resale market and for the rental market. Find out:
What are rental and resale prices like?
How long are properties staying on the market?
What types of properties are most in demand and what types are least in demand?
What is the perceived market conditions according to the sellers?
4. Learn From the Appointment
This is the ultimate way to leverage yourself. What went well with the appointment? What will you do differently next time as a result of what you learned on this appointment? Make sure you take five minutes and debrief yourself in writing!
5. Future Deals
Follow-up, follow-up, and follow-up with all of these sellers.
1. Sign Up the Deal!
This is the most obvious way to profit from every appointment you make.
2. Turn Your "Junk" Into Gold
Take the people you meet who just are not a fit for you and refer them to people in your network who can profit by the referral. This builds value into your referral network. For example: You meet with a seller who really would do better to refinance the house. You simply say, "I can see it's not a fit for me to buy this house. Your best option really is for you to refinance the property. Here's the number of a great mortgage broker I know [give him the number], and if I remember, I'll ask her to give you a call next week to see if she can help out." Then pass the seller's name and phone number on to your mortgage broker. Over time this will encourage your mortgage broker contact to pass leads to you, such as buyers whose loan fell through. There is a motivated seller now!
3. Get Information on Local Market Conditions
Use the meeting to get information for the resale market and for the rental market. Find out:
What are rental and resale prices like?
How long are properties staying on the market?
What types of properties are most in demand and what types are least in demand?
What is the perceived market conditions according to the sellers?
4. Learn From the Appointment
This is the ultimate way to leverage yourself. What went well with the appointment? What will you do differently next time as a result of what you learned on this appointment? Make sure you take five minutes and debrief yourself in writing!
5. Future Deals
Follow-up, follow-up, and follow-up with all of these sellers.
Finding Motivated Sellers: Luck or Hard Work?
Did you just hear about the investor in your local RE club that closed on a deal netting them $15,000 and they didn't even have to lay a hand on the property? Or what about the person that just bought that rental house on the same block for 30-50% less that what you paid for yours? Are you at the point of scratching your head and thinking they're just lucky? Or probably that's all they do and just don't have a life outside of real estate....right?
Somewhere in between total luck and absolute sell-out hours chasing deals is where you should be in finding truly motivated sellers, or rather having them finding you. It's a weird coincidence that the smarter I work, the luckier I get finding great deals. Did you catch that? It's not always about how many hours you put into real estate and how hard you work at your marketing program that produces the best results which is finding great deals that puts money in your pocket and that's what real estate investing is all about.
Let me share with you some simple principles in marketing for the independent real estate investor. You may already be in tune with some of these, but let's all take a pulse-check here and make sure we're on the right track.
1) What Are You Hunting?
I'm asking what types of properties and real estate opportunities are you seeking? The more narrow your focus and marketing efforts can become to a target group, the greater success you will experience. If you are seeking wholesale opportunities, then you will not gain very much success putting out "I Buy House/Lease Option" bandit signs next to established neighborhoods. In addition, you will not gain a favorable response direct mailing to preforeclosure prospects if the primary weapon in your arsenal is cash-only deals with hard money lenders that don't go above 70% LTV.
The marketing medium you use and the message you accompany with it that hits the right target market turns sellers into motivated sellers. There simply is no generic marketing message and medium that is a "one-size-fits-all" approach in real estate.
2) Just How Much Money Can You Spend?
Now, we're talking about something that hits home real fast when it's about coming out of pocket with hard-earned money in the "hope" that it will come back to you in the form of truly motivated sellers. If you're first starting out in real estate investing then it's imperative that you have a short-term budget to work within so that you're not forgetting about paying for all the other necessities in life: food, shelter clothing!
You simply DO NOT have to have a large marketing budget to be effective to grow your RE business. One §.34 postcard netted me §8,400, so it's all about hitting your target market as explained in #1. However, be realistic about what monetary constraints you have and how to incrementally build your marketing program as you experience more and more success.
3) Track Your Results!
Oh, we miss the boat on this one so much. When you are incorporating bandit signs, direct mail, flyer campaigns, etc... it can start to get confusing where and if your success rate justifies the marketing mediums you are using. Tracking your responses and closures of deals is necessary so that you can identify areas that need to be tweaked or worked on. Most importantly though when you find out that great mailing list is really working or the flyers in a particular neighborhood is getting tremendous feedback....then go in for the kill! I mean when you are measuring success and can track it effectively it allows you in full financial confidence to justify increase in marketing expenditures for areas that are producing the results desired.
My hope is for you to realize that marketing to the real estate investor is the lifeblood of his/her business. Great deals rarely come knock on your door to find you. They find you when you have a marketing system implemented that is like a funnel prescreening sellers for motivation and directs them to then contact you immediately.
Somewhere in between total luck and absolute sell-out hours chasing deals is where you should be in finding truly motivated sellers, or rather having them finding you. It's a weird coincidence that the smarter I work, the luckier I get finding great deals. Did you catch that? It's not always about how many hours you put into real estate and how hard you work at your marketing program that produces the best results which is finding great deals that puts money in your pocket and that's what real estate investing is all about.
Let me share with you some simple principles in marketing for the independent real estate investor. You may already be in tune with some of these, but let's all take a pulse-check here and make sure we're on the right track.
1) What Are You Hunting?
I'm asking what types of properties and real estate opportunities are you seeking? The more narrow your focus and marketing efforts can become to a target group, the greater success you will experience. If you are seeking wholesale opportunities, then you will not gain very much success putting out "I Buy House/Lease Option" bandit signs next to established neighborhoods. In addition, you will not gain a favorable response direct mailing to preforeclosure prospects if the primary weapon in your arsenal is cash-only deals with hard money lenders that don't go above 70% LTV.
The marketing medium you use and the message you accompany with it that hits the right target market turns sellers into motivated sellers. There simply is no generic marketing message and medium that is a "one-size-fits-all" approach in real estate.
2) Just How Much Money Can You Spend?
Now, we're talking about something that hits home real fast when it's about coming out of pocket with hard-earned money in the "hope" that it will come back to you in the form of truly motivated sellers. If you're first starting out in real estate investing then it's imperative that you have a short-term budget to work within so that you're not forgetting about paying for all the other necessities in life: food, shelter clothing!
You simply DO NOT have to have a large marketing budget to be effective to grow your RE business. One §.34 postcard netted me §8,400, so it's all about hitting your target market as explained in #1. However, be realistic about what monetary constraints you have and how to incrementally build your marketing program as you experience more and more success.
3) Track Your Results!
Oh, we miss the boat on this one so much. When you are incorporating bandit signs, direct mail, flyer campaigns, etc... it can start to get confusing where and if your success rate justifies the marketing mediums you are using. Tracking your responses and closures of deals is necessary so that you can identify areas that need to be tweaked or worked on. Most importantly though when you find out that great mailing list is really working or the flyers in a particular neighborhood is getting tremendous feedback....then go in for the kill! I mean when you are measuring success and can track it effectively it allows you in full financial confidence to justify increase in marketing expenditures for areas that are producing the results desired.
My hope is for you to realize that marketing to the real estate investor is the lifeblood of his/her business. Great deals rarely come knock on your door to find you. They find you when you have a marketing system implemented that is like a funnel prescreening sellers for motivation and directs them to then contact you immediately.
Finding Good Deals in Real Estate
A thriving real estate investor or retailer solves a lot of other people’s problems; that’s how you become successful. The more knowledge, ability, experience, contacts, and resources you have, the more solutions you can begin to offer people in solving their problems. In addition to this, you will be ahead of the pack if you can get people calling or coming to you with their specific problem first. That means you have to advertise the fact that you are in a position to help while being fair, trustworthy, and accurate in making quick decisions before the competition tries to persuade these people first.
For the above reason alone — competition — you will need to understand marketing. That means deciding on what you are going to specialize in, developing a method to define your target audience, and then attracting them with a well-written message using the different types of media to get the word out. That last paragraph brings up a good point: What exactly do you want to specialize in? Following are some categories from which to choose:
* Condos, vacation property
* Single-family homes
* Apartments for one to four families (residential duplex, triplex, fourplex)
* Commercial— hotels/motels, strip malls, office complexes, mobile home parks, storage units, parking lots, garages, restaurants, stores, apartments for five or more families, and so forth
* Industrial—factories, refineries, manufacturing plants, and so forth
* Farms—commercial, industrial, or agricultural, depending on zoning
* Raw land—lots, vacation, recreational, sub-dividable residential, commercial, industrial, agricultural, and special purpose
* Special purpose—churches, schools, hospitals, power plants, theaters, sports arenas, golf courses, marinas, and so forth
# Here are some examples of how you might go about finding some good deals:Look at bulletin boards, local papers and small independent publications. This goes for every publication you get. Make sure you get one of the first copies off the press. Go to the facility that houses the presses and get your copy before the ink has a chance to dry. Let no one beat you to the punch.
Better yet, advertise yourself and get people who are thinking about selling to call you before they actually tell the world through an ad.
# Look at the legal section of the newspapers. Contact heirs and attorneys, and sales in the garage or estate sale sections. Also, 20 percent of people who have garage sales are planning on moving soon. Ask about their house or their neighbor’s homes. Always keep your antenna up! Your odds of success increase when you choose large population centers and remain in the market constantly on the lookout for your type of deal.
# Look for vacant houses that are run down, fire damaged, or abandoned, with city notices evident. Talk to the neighbors of these homes. They usually know who owns it and what is going on. They have an interest in seeing it restored to beauty. It sure is a shame you can’t look in the mailbox to see who is receiving mail at the property in question—wouldn’t that be easy? Walk up to a property and look in a window to confirm that it is indeed vacant—but don’t endanger yourself by getting bit or shot! Use common sense. Contact out-of-state owners through property records or by letter and/or phone. Leave your cards on the door.
# OREO stands for Other Real Estate Owned. Make friends with your local lenders and let them know you are the one to call when they have a foreclosure looming or in progress. Hint: If you prequalify with lenders beforehand, they may call you sooner.
# Watch the local paper for foreclosure auctions, tax sales, and HUD and VA listed properties. Note: Auctions held in bad weather where the property absolutely must be sold are your best chance to limit competition and get property at rock-bottom prices. Because there is no low limit on what can be accepted (no reserve) you may win big.
# Real estate agents are going to try to sell you something! When you approach them be very specific with them and tell them to call only if they have an absolute steal. Ask agents to give you those expired listings since they couldn’t sell them. Suggest a 2 percent commission if they will assist with closing the paperwork after you make the deal with the seller on your own.
# Don’t be so selective. If the property is an absolute steal, lock it up and sell it to somebody who does like to work with that type of real estate. Get the option and hand it off to another buyer. Look for distressed sellers in addition to distressed property.
# Post fliers everywhere—colleges, Laundromats, shopping centers, bowling alleys, public bulletin boards, churches, local businesses, wherever large numbers of people congregate. Give them a chance to give you a lead on a hot deal. (For example, print up cards that say “I pay $500 to you at closing if I buy a house that you told me about! Do you know anyone who is selling property? Please call [your name] at 555-1212.”) Print quality business cards.
# Join organizations of all types. The sky is the limit. There are so many—just pick the ones that you would be interested in truly being a member in and let it be known you pay bounties for consummated (closed) deals.
# When you use headhunters, leave out no one. Property managers, moving companies, relocation services, neighbors, landlords, tenants, the mailman, the paper boy, gardeners, landscapers, service technicians, pest control people, friends, acquaintances, relatives, and other investors. You name it!
# Everyone should know they can make $500 if you end up buying a property they tell you about. Enlist your army! Give each of your soldier’s stacks of your cards for exponential growth.
# A special note: Water, gas, and electric company personnel who shut off utility meters can be very good bird dogs when it comes to finding property that is in trouble or vacant. Make sure they have your cards.
# Have at least 10,000 business cards printed with your offer of the $500 bounty and hand them out in stacks to everyone you can.
As you grow, you might consider TV, radio, phone books, billboards, street benches, bumper stickers, and bigger commissions. Use your imagination.
# Put up signs telling people you buy real estate.
# Make multiple lowball offers on overpriced properties and walk away. Don’t deposit earnest money but they may stew on your offer and call you a month later accepting your deal. Leave the offer with them.
# Older people should not be left out. They are very valuable informants. They know everything and need people to talk to! Listen to them. Go to free seminars on real estate. Do this not only to learn about real estate but also to capture names and circulate among real estate–minded people. Once you have their names, call your own club meeting and network to prosperity. Find your mentor here.
# Go to where people are buying those “by owner” signs. Ask them what they are selling. Follow them home and get the first look! Be first or lose the deal.
# Try offering 15 percent less than what you intend on paying. You never know; they may accept it. If they don’t, you can still negotiate up to 15 percent more and get it for what you originally were willing to pay. If it’s any higher, walk away but leave the offer on the table (the offer stands).
# Make your offer easy for the seller to understand. Get the option to buy but use a contingency to protect yourself. Iron out the details later but lock it up now!
# Buy from sellers who tend not to care: seized, foreclosed, tax sales, corporations, nonprofits, disinterested heirs, probate attorneys, and private auctions.
# Try just helping someone to sell his or her property even if you don’t want it. Be a friend and offer to help for nothing in return. You will be amazed at what happens when you sincerely try to help with no thought in mind of making money. This is a magic bullet in disguise.
Those are some of the basics of advertising and finding the opportunities to buy real estate below market. The old saying goes: You make your profit when you buy, not when you sell. (20 percent off retail, minimum).
For the above reason alone — competition — you will need to understand marketing. That means deciding on what you are going to specialize in, developing a method to define your target audience, and then attracting them with a well-written message using the different types of media to get the word out. That last paragraph brings up a good point: What exactly do you want to specialize in? Following are some categories from which to choose:
* Condos, vacation property
* Single-family homes
* Apartments for one to four families (residential duplex, triplex, fourplex)
* Commercial— hotels/motels, strip malls, office complexes, mobile home parks, storage units, parking lots, garages, restaurants, stores, apartments for five or more families, and so forth
* Industrial—factories, refineries, manufacturing plants, and so forth
* Farms—commercial, industrial, or agricultural, depending on zoning
* Raw land—lots, vacation, recreational, sub-dividable residential, commercial, industrial, agricultural, and special purpose
* Special purpose—churches, schools, hospitals, power plants, theaters, sports arenas, golf courses, marinas, and so forth
# Here are some examples of how you might go about finding some good deals:Look at bulletin boards, local papers and small independent publications. This goes for every publication you get. Make sure you get one of the first copies off the press. Go to the facility that houses the presses and get your copy before the ink has a chance to dry. Let no one beat you to the punch.
Better yet, advertise yourself and get people who are thinking about selling to call you before they actually tell the world through an ad.
# Look at the legal section of the newspapers. Contact heirs and attorneys, and sales in the garage or estate sale sections. Also, 20 percent of people who have garage sales are planning on moving soon. Ask about their house or their neighbor’s homes. Always keep your antenna up! Your odds of success increase when you choose large population centers and remain in the market constantly on the lookout for your type of deal.
# Look for vacant houses that are run down, fire damaged, or abandoned, with city notices evident. Talk to the neighbors of these homes. They usually know who owns it and what is going on. They have an interest in seeing it restored to beauty. It sure is a shame you can’t look in the mailbox to see who is receiving mail at the property in question—wouldn’t that be easy? Walk up to a property and look in a window to confirm that it is indeed vacant—but don’t endanger yourself by getting bit or shot! Use common sense. Contact out-of-state owners through property records or by letter and/or phone. Leave your cards on the door.
# OREO stands for Other Real Estate Owned. Make friends with your local lenders and let them know you are the one to call when they have a foreclosure looming or in progress. Hint: If you prequalify with lenders beforehand, they may call you sooner.
# Watch the local paper for foreclosure auctions, tax sales, and HUD and VA listed properties. Note: Auctions held in bad weather where the property absolutely must be sold are your best chance to limit competition and get property at rock-bottom prices. Because there is no low limit on what can be accepted (no reserve) you may win big.
# Real estate agents are going to try to sell you something! When you approach them be very specific with them and tell them to call only if they have an absolute steal. Ask agents to give you those expired listings since they couldn’t sell them. Suggest a 2 percent commission if they will assist with closing the paperwork after you make the deal with the seller on your own.
# Don’t be so selective. If the property is an absolute steal, lock it up and sell it to somebody who does like to work with that type of real estate. Get the option and hand it off to another buyer. Look for distressed sellers in addition to distressed property.
# Post fliers everywhere—colleges, Laundromats, shopping centers, bowling alleys, public bulletin boards, churches, local businesses, wherever large numbers of people congregate. Give them a chance to give you a lead on a hot deal. (For example, print up cards that say “I pay $500 to you at closing if I buy a house that you told me about! Do you know anyone who is selling property? Please call [your name] at 555-1212.”) Print quality business cards.
# Join organizations of all types. The sky is the limit. There are so many—just pick the ones that you would be interested in truly being a member in and let it be known you pay bounties for consummated (closed) deals.
# When you use headhunters, leave out no one. Property managers, moving companies, relocation services, neighbors, landlords, tenants, the mailman, the paper boy, gardeners, landscapers, service technicians, pest control people, friends, acquaintances, relatives, and other investors. You name it!
# Everyone should know they can make $500 if you end up buying a property they tell you about. Enlist your army! Give each of your soldier’s stacks of your cards for exponential growth.
# A special note: Water, gas, and electric company personnel who shut off utility meters can be very good bird dogs when it comes to finding property that is in trouble or vacant. Make sure they have your cards.
# Have at least 10,000 business cards printed with your offer of the $500 bounty and hand them out in stacks to everyone you can.
As you grow, you might consider TV, radio, phone books, billboards, street benches, bumper stickers, and bigger commissions. Use your imagination.
# Put up signs telling people you buy real estate.
# Make multiple lowball offers on overpriced properties and walk away. Don’t deposit earnest money but they may stew on your offer and call you a month later accepting your deal. Leave the offer with them.
# Older people should not be left out. They are very valuable informants. They know everything and need people to talk to! Listen to them. Go to free seminars on real estate. Do this not only to learn about real estate but also to capture names and circulate among real estate–minded people. Once you have their names, call your own club meeting and network to prosperity. Find your mentor here.
# Go to where people are buying those “by owner” signs. Ask them what they are selling. Follow them home and get the first look! Be first or lose the deal.
# Try offering 15 percent less than what you intend on paying. You never know; they may accept it. If they don’t, you can still negotiate up to 15 percent more and get it for what you originally were willing to pay. If it’s any higher, walk away but leave the offer on the table (the offer stands).
# Make your offer easy for the seller to understand. Get the option to buy but use a contingency to protect yourself. Iron out the details later but lock it up now!
# Buy from sellers who tend not to care: seized, foreclosed, tax sales, corporations, nonprofits, disinterested heirs, probate attorneys, and private auctions.
# Try just helping someone to sell his or her property even if you don’t want it. Be a friend and offer to help for nothing in return. You will be amazed at what happens when you sincerely try to help with no thought in mind of making money. This is a magic bullet in disguise.
Those are some of the basics of advertising and finding the opportunities to buy real estate below market. The old saying goes: You make your profit when you buy, not when you sell. (20 percent off retail, minimum).
Finding Buyers In 2008
Times they are a changin'.
Whereas in 2005 finding a buyer for your wholesale deal was easy, we are now faced with a much more challenging predicament. I have personally coined this annoying situation as "Reality."
"Reality" sucks. We all know this. Normally I can effortlessly bend it to my will, but it's actually putting up a pretty good fight this time. You see, what I want it to do is put things back the way they were a couple years ago. A couple years ago, if I so much as sneezed I would have rehabbers (buyers) lined up around the block thinking that was a secret signal that "the deal was in," or something. Here's a typical scenario from "back in the day" (which was a Wednesday by the way):
Rehabber #1: He sneezed. It's on!
Rehabber #2: Oh hellz yeah. It probably has at least $9,000 of equity in it just like the last one. I'm paying cash.
Rehabber #37: You guys are idiots. He has a cold. It doesn't mean anything (as he secretly shimmies his way closer to me while butting everyone else in line).
Rehabber #1: How do you have that much cash?
Rehabber#2: I refinanced my house and pulled the equity out. Duh. Where does anyone get money from these days? Idiot. I bought my house in 1999 for $125,000, and it just appraised for $750,000. I did a 125% LTV cash out re-fi with negative amortization at .0027% APR so my payment is only $1.75 a month. They wrote me a check for over $600,000. Cool huh? Have you seen my new boat?
Rehabber #1: But you only make $35,000 a year as a fire fighter.
Rehabber #2: I know. Isn't America amazing? I love this country. My payment goes up to like $19,000 a month at some point. I forget when. I'm sure it'll all work out. I think I'm gonna bid $10,000 over the asking price to make sure I get this one.
Ah the glory days. I'm not gonna lie - it was fun to be a wholesaler back then. And you know what? It's still fun! We simply have to adjust our sails and do things a little differently is all.
Up until about a year ago, the only thing I did to sell my properties was blast out an email to my investor's list. That was it. I would then choose between 19 different offers that I would receive on each deal. I'd always pick the buyer who I felt was going to be the least amount of hassle (namely - whoever was paying cash and closing quickly).
This is not enough anymore.
The following is exactly what you must do if you have any hopes whatsoever of making big money wholesaling real estate in this current market:
Create A V.I.P. Program For Your Buyers And Let Them Know About It
People love to feel special. I know I do. And they love to feel special because they are special. If they were hairy monkeys, they would love to feel like hairy monkeys. If they were squishy jellyfish, they would love to feel like squishy jellyfish. But they are not hairy monkeys or squishy jellyfish. They are special humans. And if we make them feel like special humans, they will like us more and be more inclined to buy.
Call All Your V.I.P. Members In Advance On All Deals
This is a pain, and it almost qualifies as work in my book, which is why I never used to do it. But oh well. We gotta do it if we want these houses sold.
The way a buyer gains membership into your exclusive V.I.P. program is to simply buy one of your properties, and close on time. That is it, and that is all. Simple enough? I have people all the time ask me to call them in advance when I get deals in. Well tell these people that you only do this for your V.I.P. members. Explain to them how they can be a part of this elite group. Explain to them that they are currently very "un-cool" by not being on your V.I.P. list. Show them how to be cool.
Give Your V.I.P. Members A Discount
Here is how it goes: You get a new deal in-house and decide you want to make $12,000 on the flip. Your purchase price with the seller is $100,000. Before blasting out the email and whatever else it is you are planning on doing to market the property, you call every single person on your V.I.P. list.
"Hey - Sam! Sammy Sam! Sammaaaayyyyy! What up, Dawg? Listen, I got this new hot, hot property that you have got to check out asap. I'm going to start marketing it tomorrow, but I wanted to give you the personal heads up because you're fabulous and I love you more than all the rest. It'll be sold for $115,000, but we'll give it to you for $112,000 since I know you can close quick. Check it out and get back to me, alright?"
It's just that simple. You will sell more properties this way. Trust me. People are more apt to respond to a personal "insider" phone call about a "new" deal than they are to a mass email that goes out to 2000 people.
Make it happen.
Whereas in 2005 finding a buyer for your wholesale deal was easy, we are now faced with a much more challenging predicament. I have personally coined this annoying situation as "Reality."
"Reality" sucks. We all know this. Normally I can effortlessly bend it to my will, but it's actually putting up a pretty good fight this time. You see, what I want it to do is put things back the way they were a couple years ago. A couple years ago, if I so much as sneezed I would have rehabbers (buyers) lined up around the block thinking that was a secret signal that "the deal was in," or something. Here's a typical scenario from "back in the day" (which was a Wednesday by the way):
Rehabber #1: He sneezed. It's on!
Rehabber #2: Oh hellz yeah. It probably has at least $9,000 of equity in it just like the last one. I'm paying cash.
Rehabber #37: You guys are idiots. He has a cold. It doesn't mean anything (as he secretly shimmies his way closer to me while butting everyone else in line).
Rehabber #1: How do you have that much cash?
Rehabber#2: I refinanced my house and pulled the equity out. Duh. Where does anyone get money from these days? Idiot. I bought my house in 1999 for $125,000, and it just appraised for $750,000. I did a 125% LTV cash out re-fi with negative amortization at .0027% APR so my payment is only $1.75 a month. They wrote me a check for over $600,000. Cool huh? Have you seen my new boat?
Rehabber #1: But you only make $35,000 a year as a fire fighter.
Rehabber #2: I know. Isn't America amazing? I love this country. My payment goes up to like $19,000 a month at some point. I forget when. I'm sure it'll all work out. I think I'm gonna bid $10,000 over the asking price to make sure I get this one.
Ah the glory days. I'm not gonna lie - it was fun to be a wholesaler back then. And you know what? It's still fun! We simply have to adjust our sails and do things a little differently is all.
Up until about a year ago, the only thing I did to sell my properties was blast out an email to my investor's list. That was it. I would then choose between 19 different offers that I would receive on each deal. I'd always pick the buyer who I felt was going to be the least amount of hassle (namely - whoever was paying cash and closing quickly).
This is not enough anymore.
The following is exactly what you must do if you have any hopes whatsoever of making big money wholesaling real estate in this current market:
Create A V.I.P. Program For Your Buyers And Let Them Know About It
People love to feel special. I know I do. And they love to feel special because they are special. If they were hairy monkeys, they would love to feel like hairy monkeys. If they were squishy jellyfish, they would love to feel like squishy jellyfish. But they are not hairy monkeys or squishy jellyfish. They are special humans. And if we make them feel like special humans, they will like us more and be more inclined to buy.
Call All Your V.I.P. Members In Advance On All Deals
This is a pain, and it almost qualifies as work in my book, which is why I never used to do it. But oh well. We gotta do it if we want these houses sold.
The way a buyer gains membership into your exclusive V.I.P. program is to simply buy one of your properties, and close on time. That is it, and that is all. Simple enough? I have people all the time ask me to call them in advance when I get deals in. Well tell these people that you only do this for your V.I.P. members. Explain to them how they can be a part of this elite group. Explain to them that they are currently very "un-cool" by not being on your V.I.P. list. Show them how to be cool.
Give Your V.I.P. Members A Discount
Here is how it goes: You get a new deal in-house and decide you want to make $12,000 on the flip. Your purchase price with the seller is $100,000. Before blasting out the email and whatever else it is you are planning on doing to market the property, you call every single person on your V.I.P. list.
"Hey - Sam! Sammy Sam! Sammaaaayyyyy! What up, Dawg? Listen, I got this new hot, hot property that you have got to check out asap. I'm going to start marketing it tomorrow, but I wanted to give you the personal heads up because you're fabulous and I love you more than all the rest. It'll be sold for $115,000, but we'll give it to you for $112,000 since I know you can close quick. Check it out and get back to me, alright?"
It's just that simple. You will sell more properties this way. Trust me. People are more apt to respond to a personal "insider" phone call about a "new" deal than they are to a mass email that goes out to 2000 people.
Make it happen.
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