by William Bronchick and Frank Pulley
As a real estate investor, there are many, many ways with which to market. For newer investors who at first depend pretty much on 100% on their marketing efforts in order to procure leads, it can be a bit confusing and intimidating, to say the least.
There is a multitude of ways one can market: Internet, Social Media, signage, door knocking, networking, and of course the good old-fashioned mailer. This type of marketing is used mainly for finding motivated sellers but certainly can be used to find potential buyers of your properties also. For purposes of this article, we will be mainly talking about finding motivated sellers.
Successful mailers need to have a good, compelling message that appeals to a possible seller’s problem and then convince the seller of the ability of the investor to solve that problem. Mailers also may need to be sent more than once. One can use postcards, typed letters and the yellow handwritten letter, along with brochures, flyers and more. Although the yellow handwritten letter has the reputation for being the best product for pulling in leads, one has to have not only a compelling message but also a decent list of folks to send to. The public can be fickle and there are never any guarantees what kind of results you will derive from your marketing efforts, but you know what the outcome will be if you don’t mail anything!
Here are 7 Tips to help you increase your chances of a marketing effort. It begins with a good list:
- Identify Your Investing Location. It’s important to make sure that the location you choose is a place you know well. Although many of us prefer to invest close to home, it’s not uncommon for an investor to choose an area that’s in another city or possibly even another state. No matter where you plan to invest, make sure you have assessed the market to make sure that your investing strategies fit well within the properties located in that area. Check current sales, rents, trends and more so you have a good knowledge base and a feel for the area. For investment areas a good distance away from where you reside, it is vitally important to also have a team of folks with “boots on the ground” in that area that can handle things when you aren’t there in person.
- Identify Your Target. It’s important to know what kind of person or target” you are going after in order to have an effective list. For example, Free and Clear properties can yield good results for finding someone that might either sell inexpensively or offer some owner financing. Non-Owner Occupied properties can possibly be inheritances. They can also be properties owned by landlords, many of whom don’t know what they are doing and may be experiencing “tenant pain”. VA Loans can be enticing also, as many of those folks are still in the service and there is a chance that they may be transferred often. The 30-60-90 day late lists are of people who are late on their payments and may not be able to make up the late payments and could be a good possibility for taking their loan over with “Subject-To” financing. People on the foreclosure list can be good prospects for a variety of strategies, including a short sale. Knowing who your target is and what particular pain or problems they might be experiencing can help you design your list and your marketing to best address those issues.
- Identify Your Investing Strategy or Strategies. Having an investment strategy or two in mind when obtaining a list and designing your marketing can help you fine-tune your list, marketing and what you plan to say to those that contact you. Having an investment strategy or two in mind will help you fine-tune the parameters of your list for more effectiveness.
- Will this be a Shotgun or Targeted Marketing? Using a shotgun approach means you might conceivably send a mailing to everyone within a particular, neighborhood, or even a whole zip code. In this type of marketing, you don’t need to narrow down your parameters as much as you would in a more targeted list. Shotgun mailings could be to an entire area or just possibly everyone in a specific area that has a VA loan, FHA loan, is in foreclosure or similar. Shotgun mailings can be quite expensive and require some good upfront cash and an abundant marketing budget but can also yield some big results. The problem is the upfront expense, so it’s not an approach for every investor. However, the outlay of cash in order to send several thousand mailings can be a bit daunting, especially for the beginning investor or the investor on a budget.
- Determine Your List Parameters. Depending on what type of message you plan to send it’s important to think about your list parameters in order to narrow it down as closely as possible to your desired target seller or buyer. It is amazing to me what amount and detail of information are available about each of us out there. It is also possible to get lists that reveal much of that information. Be aware that the more detail one requests for their list, the more expensive it will be. One can get a lot of detail in even some of the most inexpensive lists with parameters such as: “All Non Owner Occupied houses in a certain zip code, the assessed value between $100- $250k.” You can even set the number of beds and baths, specific locations and how long a sellers name has been on the title as additional parameters.
- Determine Your List Source. Title companies in some states (like CO and NV) can furnish you some pretty good lists at a great price. Unfortunately, in some states, the state real estate commission has put the kibosh on title companies providing these for investors. There are also several sites available that can sell you lists and they do it pretty reasonably. (avg. is about 8-15 cents per lead depending on the depth of parameters) listsource.com, consumerdataleads.com, realfastdata.com, yellowletterscomplete.com and more can get you some pretty good lists. Some title companies use a service called Value Check in order to help you sort down your leads.
- Track Your Response Rate. The old saying, “You can’t manage what you can’t measure” is so true. It is essential that you track the results of your mailing (or any other type of marketing) campaign. One should expect a 2-3% response, but understand not all of those will be deals. It may be necessary to mail a 2nd or possibly even a 3rd time if you want to get the most optimal results. I used to mail up to 7 times but now, if my mailings aren’t producing the desired results after the 2nd or 3rd mailing, I will usually pull up stakes in that area and try to mail to a similar list in another area.
Here are a few other things to keep in mind. Don’t be intimidated by choosing a list. Talk to your local title company, if you are in an area that allows them to sell lists to you. They normally have a marketing person on staff that can help you make good choices on your list parameters, as long as you have a good idea of your investing strategy and location in mind.
Otherwise, if you are using one of the commercial list sellers, most of them are pretty easy to contact and they can be very helpful in walking you through the list and sorting the parameters available. Commercial list sellers normally have many more parameters available than do title companies, but as mentioned before, the more detailed the parameters, the more costly the list per lead.
Finally, talk to other people within your network. See what they are doing. If you have a trusted advisor or mentor, seek their advice! There is no time like the present to get started!
Here’s to your success!