My brain is about to explode. :banghead The main speaker at my REIA last night was talking about having a marketing plan. I need to be constant in seeking out motivated sellers. How are all of you organizing and implementing your real estate marketing? I’m wondering should can a software program do this?
Stop making it out to be harder than it is. Chill. Your marketing plan at it’s simplest form is nothing more than a plan of attack. And it doesn’t have to be a written down plan of attack. It can be in your head. Do you wish to go after the vacant properties, properties that the local code enforcement has given weeds and trash violations to, probate court, divorced people, etc. What kind of “people problems” are you going to search out.
Then determine the best way to get in touch with these people (which you can ask here). Then if you are talking about doing direct mail rather than calling them, write your letter or search “probate letter” etc online to get a sample. Then send it out.
NO you can not have a software program do this. Finding deals requires a little work, BUT IT IS EASY WORK.
So decide what type of deals you want to go after and ask how to communicate with the people.
Thanks for the reply Hooch. I want to target vacant properties, local code enforcement violations, absentee owners, and frustrated landlords. I guess one of my problems is that I don’t know in what situation should I use postcards and what situation I should send out letters or should I just send out both? I’m thinking I should send out targeted postcards to my list and just use my letters for targeting individuals from properties I find by driving around. Does that sound right Hooch?
I own a large advertising agency so you can be sure I know what I am talking about. Oversized post cards get a .5 to 1 percent response rate on average. You can get zero. When I talk with my clients, that is the thing to do. Why? Because I own an ad agency and I like to get more work than just writing an ad. Graphic design is our thing and I will probably get a logo and more from it as well.
But the reality is, nothing beats a personalized letter. It is not cost effective to do on a large mailing of 15K plus like most people do BUT you are doing highly focused micro marketing. You are targeting very select people. You may go to one part of town and find 200 vacant or in dire need of rehab properties. Your code enforcement may have a few hundred good potential code violators. ETC. Not many so you have to switch around your marketing. Go after these people, then next month go after those people. ETC.
Get your list on an excel spread sheet. Then use Microsoft Word to do a mail merge. That way you can insert in a personalized name, the house you are interested in, etc, anywhere within the letter. That is by far the fastest way of doing it. You then can do the mail merge on envelopes and print them off too. Just match the letter name to the envelope and send them off.
I always add a post it note right on the front of the letter that says in my handwriting, “John, give me a call! 555-5555”
That post it will dramatically increase your response rate. I even have some people call me up just to say that they don’t want to sell their property!
Do this and you can expect anywhere from a 10% to 25% response. For me most often I am up around 18% to 22% but from time to time it has been less. And sometimes 25%. I will send out about 150 at a time so I have a chance to look over the properties I get calls on and make a decision on them. I learned the hard way on the first mailing of 500. I got way to many people calling me, I was focused on a couple of deals that I though would be the best and I passed off the other people. Those deals went bust and I basically wasted the others because I “thought” I had something solid already.
Also, it is nice to get that mail to them around Friday or Saturday. Broke people aren’t very happy on the work week. Catch em when their mood is lifted.
It is difficult to find out the details of the how when you first start, but once you know the steps it becomes much easier.
- Who are the motivated? people facing foreclosure, behind on payments
- Who might be motivated? expired listings, absentee owners, landlords, those trying to sell on their own, people with trashed homes
- Who you don’t care for? those who are current, no sign of financial stress. Those who do not have enough equity aka just purchased this or last year, in case of sinking cities, those who may still have equity based on depressionation.
How do you find them?
- Companies sell foreclosure listings, agents have list of expireds, some list brokers have late payment lists but expensive
- List companies have absentee owners, landlords lists
- FSBO sites have for sale by owner, or you see them around
What do you care for?
- How much equity/spread do you need? how long should they own the house to have such spread?
- which neighborhoods contain that type of equity?
- Which houses meet your criteria from rooms, sqft, price range
what do you tell them?
- You develop a marketing message that fits with your negotiation and your investing strategy
- You make it convincing and encouraging to call you
- You make it extremely easy for them to call you
How do you reach them?
- Send them a post card once a week for a month, this is too general but quicker this way
- Send them personalized letters once a week for a month
- You could use bandit signs around the neghborhoods you want to invest in
There is no magic to it. The devil is in the details and the what to say and how to say it.
1. Who are the motivated? people facing foreclosure, behind on payments
Xpandergt for more detail on this, the people who are motivated have some sort of desperate situation where they HAVE to sell their house. Divorce, foreclosure, behind on payments, etc. Look at my web site bullets. Every one of them is a potential problem. And that is a list of a few. http://www.roanokecash.com/
3. Who you don’t care for? those who are current, no sign of financial stress. Those who do not have enough equity aka just purchased this or last year, in case of sinking cities, those who may still have equity based on depressionation.
Those who are currant and have no financial issues are NOT motivated. They will NOT likely give you the deal that you are looking for as Fadi says. Not enough equity is handled with a short sale but is better left for the future when you get a little experience under the belt. Plenty of equity can be wonderfully handled with a subject to. Start out with baby steps. Learn how to do ONE thing. Like buying VACANT property. Then start exploring other things. You don’t have to know it ALL to start. The rest will come if you KEEP learning. You will then kick yourself in the A** like we all did and say, darn, I could have done a subject to on that house. Or that one was prime for a short sale. Take it simple at first.
[b]How do you find them?
- Companies sell foreclosure listings, agents have list of expireds, some list brokers have late payment lists but expensive[/b]
Each one is found in a different way. You need to focus on ONLY 1 at first so you don’t get overwhelmed. Foreclosures are easily found by watching the local papers legal notices every day. But you’ve got to work the deal quickly. More time if you do it the way fadi suggests. If you buy property on the court house steps you BETTER know what you are doing. I buy this way and I would advise a newbie to take some easier routes at first. Get your feet wet with some easy stuff.
Preforeclosures (people who are getting ready to get forclosed on) are found with bandit signs, we buy houses ads on craigslist, little ads in the junk freebie paper, etc. You will need to be experienced with short sales for preforeclosures.
3. FSBO sites have for sale by owner, or you see them around
In my opinion there are no good deals in the FSBO magazines. At least I haven’t found any. These are often people who want Full Market Value for their house and are too cheap to want to loose the commission from a Realtor. People look for these if they want to find a lease option where they are on the buyer side (the losing side most often). Sellers on a lease option can make some nice cash though.
You need to be thinking, vacant houses, probate court, code violations, divorces, etc. Easy stuff first.
[b]What do you care for?
- How much equity/spread do you need? how long should they own the house to have such spread?[/b]
Just come here with your deals and ask if something can be done with it. Each deal is different. They don’t HAVE to HAVE any equity for you to do a short sale. Put the person off and tell them you are going to work up some numbers to give them an offer. Bring your deal here. We will help you out.
2. which neighborhoods contain that type of equity?
There is good and bad equity in EVERY neighborhood. Many of my junker houses I buy are owned outright. Just MORE equity in the nice neighborhoods as the houses are worth more.
2. Send them personalized letters once a week for a month
Send them one or two AND give them a call. Look their number up on the web. Some you will find. Some you wont. The time frame on letters depends on who you are targeting. Different in probate than vacant or evictions, etc.
There is no magic to it. The devil is in the details and the what to say and how to say it.
Fadi is right. And the details are thick unless you just target ONE thing at a time. You DON’T have to know it all at once. What do they call that analyzation asphyxiation? Whatever that term is, you will get STUCK in the details unless you just pick ONE thing and go at it full speed ahead. JUST DO IT as NIKE says.
That is why I’m going back to banging my head against the wall. :banghead I’m kidding. Thanks Hooch and Fadi. You both gave me so very sound advice. I’m focusing primarily on deals I can wholesale. Here’s a quick update. I’ve already started implementing it today. I acquired the list of properties with code violations as well as this morning going to rent court and copying down the addresses of properties that were on the court’s docket for the day. I’m going to use Haines to find out who’s the owners are and their addresses. On top of that, I created my out of town absentee owner letter, my vacant house letter, and my frustrated landlord letter. Tomorrow I will finish my lists, mail merge them and start mailing out my letters early next week. I’ll keep you guys updated and thanks again. :beer
Good Job! You’re definitely on your way. Looking forward to hearing your first deals that you can bring to the table.
I hope I don’t make you hit your head some more but marketing is the most important part of our business or any for that matter. Ever wonder why large companies spend 8-12 percent of their budget on it?
After spending hundreds of thousands of dollars marketing and building a software platform to write letters it really boils down to one act.
Consistency.
Without it you’re dead. Sure a deal will fall into your lap every once in a while with a hit and miss program however an on purpose campaign works wonders. If you want I will send you a book I wrote on the subject… That may have just broke the rules, if so someone will edit this post I am sure. Sorry guys.
I am almost exclusively doing direct mail… Using mail I can pin point my market or have a shotgun approach depending on my prospect type and budget. Is every home owner is a prospect? If you said yes then you’re on your way to greatness. I would pick a main prospect group and a farm and mail then mail some more…
Good luck.
Michael
Don’t worry Michael. I took some Real Estate Tylenol. I’m good to go for the moment. :biggrin You are so right about the marketing aspect to real estate. To be a great Real Estate Investor, one has to be a master marketeer first. Being great at marketing is more of science then art. Oh well, here’s to trial and error and PROFIT. :bobble
Fadi, Hooch
When you mail letters, do you use a letter head (logo, colors etc)?
Also what do you specify as the return address - your name or company name? Just wondering if the response rates will change either way?
For a targeted mailing campaign, would you recommend postcards or letters?
When you mail letters, do you use a letter head (logo, colors etc)?
You could but I prefer to just be a guy who wants to buy their house. I don’t like them to think that they are dealing with a professional that they have to put their guard up against. Just a nice guy who wants to buy their house. A highly personalized letter via mail merge so they think I sat down and typed it up. That is the main thing. Personalized.
The only place I use my “professional” image is on my business cards and “we buy houses ads” as that leads them to my website. That also scrubs out some of the losers who want to sell me their house for full market value. But on a targeted list, you already know they have some sort of “people problem”. So you are not trying to weed out anyone. You want as many of them as possible to call you.
Also what do you specify as the return address - your name or company name? Just wondering if the response rates will change either way?
I use my businesses physical address. I haven’t tried my PO Box on the letters due to the fact that I “think” that it may reduce the response slightly.
For a targeted mailing campaign, would you recommend postcards or letters?
Never postcards for micro marketing. NEVER. Your objective on these small lists is to increase your response. Not decrease it. Postcards are usefully for blanket mailings, not targeted mailings. And put a hand written post it on the letter. You’re spending your hard earned money. You CAN do a direct mail campaign and get NO results! Do it right at first so you have something GOOD to benchmark from. Then mess around with it.
Thanks Hooch, Thats very helpful.
In your experience, have you seen benefit of using window envelopes, or do regular envelopes with printed addresses work better? With window envelopes we can mail merge the address which shows from the window.
Regarding the question about personal name or company name on the return address, I understand that you put only the address. No name.
In your experience, have you seen benefit of using window envelopes, or do regular envelopes with printed addresses work better? With window envelopes we can mail merge the address which shows from the window.
Never use a window envelope!!! That is a BILL. You will instantly set them off and give them a bad feeling when they are opening it up. Remember, most of these people who have hardship situations also have financial problems, bills from here to China, collection agents calling them, etc. You want them to open that thing up thinking it could be some long lost friend that they forgot about. Give them NO bad feelings.
Some people hand write the envelopes for more effect. I don’t have time for all of that. I will mail merge the letters and mail merge the envelopes and match them up. The only handwritten part of my letters is the signature at the bottom and the post it that says “Bill, Give me a call! 555-5555” I leave out an area code. I want every part of this letter to look like I’m just a nice guy that lives locally and wants to buy their house. That’s it. Not a professional who’s going to take advantage of them, just a friend.
Regarding the question about personal name or company name on the return address, I understand that you put only the address. No name.
NO, I put MY Name on the letter. My name on the envelope too! I want them to see the envelope, not know who it is from. Typically they see an envelope and it is from Geico or the cable company, etc. I want them to see it is from a “person” so they will open it up and look at it. I have been flooded with good deals for the past few months. I have a wholesaler who is bringing me incredible deals. The last time I did a mailing was 4 months ago. I got a phone call yesterday from someone who got my letter. People SAVE my letters! Good stuff. They save it because they actually think I am just a nice guy who wants to give them an offer. I don’t tell them that I am going to give them a wholesale offer. All of that stuff will come out after I knock them off their horse and show them that their property isn’t worth what they may think it is. I save the attack until the end.
You said you put a stiicky note on the envelope. On the outside/inside? does it stay on going through the mailing process???
Sorry, did I say envelope? I meant to say letter. Put the post it right in the middle of the letter. Then fold it up from both sides like you normally would for a standard number 10 envelope. So… They open it up and the first thing they see is your little note that they have to pull off to read the letter. They see “John, give me a call - 555-5555” and it is practically impossible for them NOT to read it. The curiosity of WHY to call me makes them read it.
thanks Hooch, simplicity is genius!!!