Multiple Streams of Motivated Sellers
| | Tuesday, August 03, 2004 @ 10:04 AM EDT
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Contributed by: Richard Roop
Richard Roop Properties
Read more archived articles about Marketing
Finding great deals is one of the toughest jobs for an investor. That’s right. Raising cash or finding a “quick turn” buyer is easy on killer deals. The market is full of bargain hunters and private investors who have money. So the real key to investment success is finding properties you can pick up at a great price or with great terms.
There are plenty of opportunities if you’re willing to do what it takes to find deals. But some methods require more grunt work
and than others. And frankly, I’m lazy.
I discovered long ago that...
I preferred having sellers call ME!
I want sellers asking ME to do business with them. I don't like knocking on doors unannounced. In fact, I’d never do that. I won’t call on “for sale by owner” ads either. Yet… both are proven ways to locate motivated sellers.
My answer was to learn effective direct response marketing techniques and get sellers calling me. And that’s what I recommend to both new and seasoned investors.
For over 4 years, my real estate investment company has consistently done at least 3 or 4 deals a month. The average profit per house is in excess of $27,000. This is accomplished by…
Marketing yourself as serious homebuyer
We never go out and hunt for good deals… and rarely do I ever buy a house listed with an agent. We focus on getting sellers calling who like the idea of a quick and easy sale.
You can dramatically improve your chances of achieving your “wealth building” and “cash flow” goals by understanding how direct response marketing can help you leverage your time, money and efforts. Did I say I was lazy? It’s true.
Effective marketing is the process of delivering a series of well-crafted MESSAGES to the ideal MARKETS using “multiple streams” of low cost MEDIA. I’ll expand on that formula in a moment. First, let’s explore the unique benefits of using this approach to find great deals.
Advantages of having sellers call you
• Everyone you talk to will be prescreened. That means they own a house, thinking of selling and motivated enough to respond. You leverage your time by speaking only to prescreened prospects and buying a higher percentage of the houses you find for sale.
• You can educate the seller on the specific benefits you can offer BEFORE they call. Now you'll spend less time repeating yourself.
• You eliminate the need to call sellers. You might normally chase after sellers with a sign in their yard, an ad in the paper, an expired listing… or their name on a foreclosure list… but now they’re calling you instead.
• You'll talk to sellers who haven't done anything to publicize their desire to sell. That means less competition and bigger profits.
developing a Powerful Marketing Strategy
As we walk through this process, I’ll include some special web links where you can get more instruction or see examples. These tools are on my free marketing website for real estate investors. You’ll discover a wealth of articles and steaming online audio revealing little known “sledgehammer” techniques.
Tapping into these resources will help you more easily apply these ideas in your operation. I created this website to help you buy and sell houses with little or no money down… without getting loans from banks… without the need for agents… and without relying on mortgage brokers to perform.
It surprises me to meet so many real estate investors who are oblivious to the proven strategies readily available for acquiring dozens of houses without using their credit or making large down payments… without struggling with tenants… and without fixing houses. But I can’t imagine operating any other way!
How to get the right message to the right market at the right time
Now we’ll explore the three M’s of direct response marketing for real estate entrepreneurs… identifying who is your Market, creating a compelling Message and then testing various types of Media proven to work best for investors.
1. Clearly identifying your MARKET
Ask yourself these questions. Then I’ll give you my answers for buying and selling single family homes.
Who do you want to communicate to?
We want homeowners only… preferably with a house for sale.
Who can you help the most?
We’re looking for flexible and motivated sellers.
Who's most likely to need for your help?
Some obvious prospects may include property owners dealing with: extensive repairs, too much debt, foreclosure, bankruptcy, divorce, job transfer, probate, bad tenants, etc.
Where do you want to buy?
I suggest “farm” specific neighborhoods or parts of town where you can become a big fish in a small pond. There are some super advantages of targeting to the same 25,000 homeowners five times (over a period of time) than promoting yourself to 125,000 homeowners just once. The cost is the same but the response will be dramatically different when a prospective seller sees what you have to offer numerous times.
What types of property to target?
I prefer casting a wide net for single family homes because they are plentiful and in high demand. Other more specialized niches you can attempt to target include ugly houses (they need lots of work), luxury homes (if you know your exit strategy), multi-family properties, newer homes in newer subdivisions, etc.
2. Creating a MESSAGE that matches your market
Here are some of the elements to include in your marketing message followed by examples for buying single family homes.
What are the top benefits can you offer the seller?
Fast cash, fair price, quick closing, instant debt relief.
Why should they choose you over the other options they have to sell their house?
Avoid putting house on the market, avoid a buyer backing out at last minute, sell “as is” without fixing up a property to show, avoid becoming an unwanted landlord if it doesn’t sell fast enough.
What are the most important benefits you can offer to a seller?
Enjoying peace of mind, avoiding uncertainty, making the whole process easy.
What problems can you help a seller overcome?
Avoid foreclosure, avoid bankruptcy, avoid double house payments, avoid relying on an agent to perform.
Why is it easy and safe to do business with you?
Include testimonials, organizational affiliations, recognition by local media, actual real life examples of how you helped others… and any other proof that you’re a professional that delivers on your promises.
Why should they call you now?
“Call me first and you still have all your other options available if I can’t make you an acceptable offer. Imagine, your house could be sold by this time next week.”
What do you want them to do next?
Go online and submit property information, call an operator 24 hours a day to submit property information, call to learn more and take the next step, complete the enclosed form and fax now, mail in the enclosed postcard, call a 24 hour recorded message to learn more, request a free special report, etc.
3. Proven, cost effective MEDIA to get your message delivered
Classified Ads
The structure of a classified ad is a headline with a few benefits and a call to action. Look for publications that reach your “farm” area such as daily newspapers, weekly papers, shopper magazines, etc. Consider using a “2-step” approach by incorporating a 24 hour recorded message line or website and then systematically deliver more information and benefits… automatically.
Display Ads
For small display or space ads, use the same type of message in a classified ad. When cost effective (usually because the publication has a small circulation) place large display ads and get your entire message out in one shot. Directory ads such as in the phone book can be great once you’re ready to commit for a year.
Flyers
You can get your entire message on a full-page flyer. Sell the other side to a non-competing business and cut you costs in half. Or use the other side to find home new buyers or tenants. Distribute in many ways but my favorite is to having them inserted in newspapers.
Signs
Yard signs, pole signs, vehicle skins and billboards all work well.
Web Site & Email
These days, if you’re not using a web site to distribute your marketing message, to gather info and to build credibility, you’re working to hard. If needed, hire someone to help you with it.
Free Special Reports
An awesome technique is to have a sales letter that includes ALL the elements of your marketing message as discussed in step 2. This will be the same message used in large display ads, web sites or flyers. Beef it up with anything that would give you credibility. Now you have a Free Special Report. Offer to mail it in your 2-step advertising. Or use it as a “leave behind” when visiting prospective sellers. I mail one to a seller on the same day they call me… whether I have an appointment or not. It’s a super strategy.
Letters
Nothing beats letters mailed to a highly targeted market. Write out your marketing message in a personal tone. Do everything to make your letter look personal, as if you sent it to just one person. Handwritten is best but a “typewriter look” also works great.
Postcards
This is my favorite media because it is cheap and easy. Postcards do not have to look personal but should have a big, bold compelling headline. Use the same headline from your classified ad, display ads, flyer and free special report. You can systematically print and mail regular postcards for about 24 cents complete (when normal postage alone is 23 cents today) by using the service offered by the U.S. Postal Service. Go to www.usps.com. I also have a system where you can mail large, oversized postcards for just 30 cents complete. These are big enough in include your full flyer message, free special report or lengthy sales letter.
Business cards
Always have a 2-step marketing message on your business cards. Carry 10 cards everyday and make sure you come home with none.
Other types of media…
The list is long and I recommend you start with the examples above first. However, there are other ways to get your message delivered to your market: faxes, seminars, door knocking crew, radio, TV, advertising specialties, outbound calls, etc.
To summarize, your goal should be to develop the most comprehensive marketing message possible. Intend to communicate everything that would be of interest to your targeted market. Tell the whole story. Deliver the entire message when the media is cost effective… as with a detailed flyer, free special report or personal looking letter. If that’s cost prohibitive, use a simple two-step approach whereby prospects contact you and then are told they can get “the rest of the story” by calling a free recorded message, visiting your web site or ordering a free special report.
The Bottom Line
Most beginning investors have more time than money... and a marketing plan requires a regular investment of marketing dollars. 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 efforts for an entire YEAR, even if you're spending up to $800 per month.
If you know how to solve seller's problems by buying their houses creatively, apply some of these ideas to buy more houses with less work and make more money.
Note: Known as “The Marketing Consultant for Real Estate Entrepreneurs,” Richard Roop is an active investor who as completed over 200 deals near his home in Colorado. He’s also dedicated to sharing his marketing expertise with real estate investors nationwide. He can be contacted here.
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