In 1999 I attended a free real estate investing presentation promoted on late night TV. Since I had been successfully buying and selling property as a full-time real estate entrepreneur during the previous three years, I was curious to learn some new ideas–maybe a new angle to help me buy more homes.
To my surprise, the presenter told the audience (consisting mostly of opportunity seekers) that finding good real estate investments was easy and raising the money to buy them was the challenge.
I immediately jumped out of my chair and screamed, “BULL!” (Well, not really, but I wanted to…)
This polished speaker went on to offer his program (several thousand dollars) to teach you how to go out and find those real estate bargains. And he would graciously help you by putting up the money. What a lucrative and effective way to find good deals. For him!
The key to success is finding good deals
Any experienced real estate investor knows the opposite is true. Finding great deals is one of the toughest jobs. Funding or flipping good deals is easy. The market is full of bargain hunters and private investors who have money. So the real key to real estate success is finding properties you can pick up at a great price or with great terms.
There are plenty of opportunities for those who are willing to do what it takes to find deals. But some methods require more grunt work than others. I discovered long ago that I prefer having customers call me asking me to do business with them. I don’t like knocking on doors unannounced or cold calling people on the phone.
Accelerate your success with a marketing plan
My answer was to learn effective direct response marketing techniques. On average, my company consistently buys three or four properties each month by marketing ourselves as home buyers. Sellers call us.
In order to build a lucrative real estate investing operation, you must treat it as a business, whether full-time or part-time. The goal of any business is to generate profits, and you can improve your chances of success by understanding the vital role of marketing.
Effective marketing is delivering a well-crafted MESSAGE to a targeted MARKET through the use of various types of proven MEDIA. The advantages of using marketing to get motivated sellers calling you are numerous. A few include:
- Everyone you talk to will be prescreened. That means they own a house, they’re thinking of selling, and they’re motivated enough to respond to your message. You leverage your valuable time by speaking only to prescreened prospects. And you will buy a higher percentage of the houses you find for sale.
- You can educate the seller about how you buy houses and the specific benefits you offer before they call. That way you’ll spend less time repeating your message to every prospect.
- You eliminate the need to call sellers. Homeowners with FSBO signs, classified ads, pending foreclosures, or expired listings will call you.
- You will talk to sellers who have not done anything to publicize their need to sell. That means less competition.
Develop your marketing strategy
To develop your strategy, break it down into three parts. First, clearly define your message. Next, identify who needs to get your message. And finally, decide what media you want to “test” to get your sales message delivered.
- Developing your message
What are you offering the sellers? What makes your program unique when compared to other options the sellers have? What are the most important benefits you can offer to a seller? What problems can you help a seller overcome? Why is it easy and safe to do business with you? Why should they call you now? What do you want them to do next? - Identifying your market
Who do you want to talk to (sellers)? Who can you help the most (flexible sellers)? Who has a demonstrated need for your services (foreclosure, divorce, transfer, landlords, etc.)? Who do you want to avoid (renters)? Where do you want to buy? Do you want to focus on certain types of property? - Choosing your media
Classified ads, display ads, flyers, yard signs, web site, email, free recorded message, special report, letters, postcards, business cards, faxes, seminars, radio ads, TV ads, billboards, yellow pages, etc.
Your goal should be to develop the most comprehensive message you can by communicating everything that would be of interest to your targeted market.
Tell the whole story. Deliver the entire message when it’s cost effective (as with a detailed flyer or sales letter). When cost prohibited, use a two-step approach. For example, your sign or classified ad might direct sellers to call a free recorded message, or visit your web site, where they then get “the rest of the story.”
Most beginning investors have more time than money. And a marketing plan requires a regular investment. You can call sellers and knock on doors for free. And during the startup stage of your business, that’s OK. But consider this: A $15,000 profit from buying and selling one house can fund all your marketing for an entire year, even if you’re spending up to $800 per month.
If you know how to solve sellers’ problems by buying their houses creatively, apply some of these ideas to buy more houses with less work and make more profits.