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).