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.
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