Do you know what causes more investors to fail at this business than anything else? Let me tell you something, if this business was called “Real Estate Marketing” instead of “Real Estate Investing,” most investors would correctly understand the business.
Most investors simply fail at their business because they don't view real estate as a true business. This is a huge mistake.
All Successful Businesses Make Money the Same Way:
1. Purchase a Product/Service at a Set Cost
2. Sell the Product/Service at a Higher Cost
3. Achieve this in a Quantifiable Period of Time
Now I know some businesses are rather poor with understanding cash flow, so some businesses will not truly understand their overhead costs. Therefore some businesses will lose money between steps 1 and 2. However, most businesses have their make or break at step 3. Do you know what changes step 3 drastically?
Truth be told, 90% of any business is marketing. If you have a great business with poor marketing, then you don't have a business at all. McDonald's may not make the best hamburger but do you know what they are the best in the world at? They sure know a thing or two about having the best system of business and marketing to deliver their hamburgers to the end buyer. Take a lesson from McDonald's and become the master of marketing in real estate.
If you really want to get paid with short sales or any other type of real estate investing, you need to correctly market your business. There are many investors know all the proper techniques but then don't have enough qualified leads to apply their techniques to. That means, they've mastered business steps 1 and 2 but don't have a clue how to run step number 3. Do you know what the worst part of that is? It's the most important step.
Because the market possibilities are endless, I can't give you ALL the marketing methods. Besides, you need to use your creativity. Here are some things that will work almost everywhere.
You've probably seen these everywhere but do you know why? These are uber cheap and they work. Go to your local office depot or equivalent store and buy big pieces of bristol board or some similar material. In big bold letters write, “We Buy Houses” or “We Do Short Sales” and below it display your contact number. Now I usually tape these to telephone poles at busy intersections so it will probably need to be a tall and skinny sign to fit on a telephone and still be legible. Make sure your lettering is visible from a distance. This is the number one thing people don't do correctly when they are marketing yard sales and things of that nature. They often put time and effort into marketing their event and their sign isn't visible from the road! Tell me you haven't seen one of these and squinted to try and make out what it says.
Your lettering should be big and bold and of course, readable from a distance. Believe it or not, because we are bombarded with so much traditional advertising on a daily basis, home made signs actually generate more attention than a more traditional custom sign.
Depending on your target area, these signs will get torn down anywhere from weekly to monthly although there are a few areas in the country (only a couple) that they are so on top of removing these signs that yours won't last a full day. It doesn't matter; keep posting them regardless of what the city's schedule is. When you've made money from a few deals, you can pay some kids to do this for you and your business will bring you deals on autopilot. In the mean time, this costs about $10 and it works. Stay on top of your signs and you will have a steady stream of people calling you.
When your seller calls you, all you need to ask is the one magic question, “Mr. Seller, how come you're selling it?”
Online Classified Sites
Craigslist.org, backpage.com, kijiji.com are all places people list their homes for sale. There are always more local directory sites like this that work in your local area as well. Most motivated sellers are looking for the cheapest methods (and what's cheaper than free?) to market their properties. Therefore, they generally don't employ a real estate agent because they simply think that they can't afford it. Generally speaking, the cheaper the site is to list, the greater number of motivated sellers you will find advertised on it. Put your “we buy houses” ad right next to theirs. It will probably get taken down from the site regularly and often, keep regularly posting it up there. Alternately, you can copy and paste their emails and just send them the “We Buy Houses” email with your number. It all works the same. It's especially useful if that person has poorly written their own marketing material then you know selling their house may already be a nightmare.
When they call you, ask them the magic question of why they're selling the property.
Old Fashioned Calling FSBOs (For Sale By Owner Ads)
If you know anyone who works for a telemarketer, they typically spend 8 hours per day calling people and generating leads for the company. In the beginning, most people who start out real estate investing start out completely broke or close to it. Therefore, the easiest way to generate leads is using the same technique. Now I'm not saying you will ever be received on the phone like a telemarketer, I just mean to point out that they treat lead generation like a business and so should you.
I kid you not, in the beginning all you have to do is spend 1 hour per day, 5 days per week calling FSBO ads. Of course, the more your contribution is the greater your financial rewards will be. Call homes that are listed for sale privately. When the owner responds, ask them to tell you about the home. Truth be told, we don't care about the home yet but it builds rapport and makes you seem like a more serious buyer. After they finish, ask them the magic question. “Mr. Seller, it seems like a nice place, how come you're selling it?”
If you do this single solitary act, you will generate quality leads and regularly close deals. Everyone knows it works and so few people actually take the time to do it.
Remember that because the people already have the home for sale, they will welcome your call. Even though you're working like a telemarketer, the seller has a prior interest in receiving your call. In fact, he or she has actually advertised to find you. Your call is always welcome so there is no “rejection” to fear.
Call Mortgage Brokers
Do you know what most people do when they owe more than their home is worth? They first try to refinance their home. The first people to know about which sellers are truly motivated are the mortgage brokers. Get in tight with some mortgage brokers and pay them to generate you leads. They may not give you the seller's contact information directly but they may pass along your contact information which is just as good if you have built strong enough rapport. If you have 10 mortgage brokers working for you, you will generate all the leads you need. You will have to groom and maintain these relationships. However, you can automate some of this with a well directed and written email mailing list that seems as if it is personally directed to that broker. I recommend offering to pay them a $500 reward on closing but to actually pay them $1000 when the time comes. Learn to “under-promise and over-deliver.” It'll really make them work harder to generate you leads and they'll be sure to tell others about what you have done.
In all these cases, find out on the phone if your seller is truly motivated. If they are motivated and ready, schedule an appointment to meet them face to face. It's just always easier when they can meet and see you.
Remember, real estate investing is a business and marketing is the key to any type of business. Marketing will greatly improve business step #3 and change your timelines from knowing techniques and having only a few leads, to having more qualified leads close with you. Apply this knowledge to build yourself a real estate empire.