How To Get Consistent Leads From Buyer's And Seller's
By: Glen A.
Submitted: 01:41PM on Monday 10 November 2008
The author has permitted the reprinting and redistribution of this article.
This topic seems to be the most challenging for most investors. I know when I first started this was a big hurdle for me. So let’s start out with finding leads. I don’t know about you, but I want sellers calling me with properties for sale. I didn’t want to be the one calling them. I hear about investor’s cold calling the FSBO’s (For Sale by Owners) in the newspaper.
I personally would rather have my finger nails pulled off then to try and cold call a potential seller in the newspaper. I’m not saying that calling on the newspaper ads wouldn’t turn up a deal or two. What I’m getting at, is you need specific questions answered in order to find out if this is a deal. How many sellers that you contact from an ad in the newspaper would be willing to give you their loan balance? Not too many. But if they call you off your marketing, in most cases they would give you all the information that you asked… providing they need to sell their property and are motivated.
It’s about positioning your self for success. Let seller’s chase you to sell their property, NOT the other way around.
So let’s get into how to get consistent leads. If you’re just starting out and your funds are limited let me give you a few quick ways to locate Seller’s.
1.Drive specific neighborhoods where you want to buy property. Make sure if you’re looking for fixer uppers that you’re NOT in a gated community. Stay in an area where you know that these homes need some work. Drive the area and take down addresses of properties that have over grown lawns, the paints pealing, the roof is in bad condition. The property should look ugly compared to the rest of the houses in the neighborhood. After you collect 10-20 addresses you now have to go back to your office and look up the owners on your property appraiser’s website. I’m here in Seminole County so my property appraiser’s website would be “Seminole County Property Appraisers.” You’ll write down the name and address of the owners and send them a letter or postcard stating that you purchase properties in this area.
2.You can also drive these same areas and collect all the addresses from Seller’s that have a FSBO (For Sale By Owner) sign up. Not a realtor sign. A For sale by Owner sign. Collect the address and send them a letter or postcard. Let them call you after receiving your message. This qualifies them that they want to sell their property quickly. Usually a Seller trying to sell a property without a realtor already knows that they have little equity in which to pay a realtor’s 6% commission.
3.Another cheap way is to run an ad in the local paper. Please don’t use “We Buy Houses” in any of your advertisements. If you want to separate your self from everyone else you need to market yourself differently so people remember you.
Give the potential Seller a reason to do business with you over anyone else. My unique selling proposition was… “Sell Your House Today and Receive the Exact Same Equity that You’d Receive if you listed and Sold through A Realtor Guaranteed”. That’s a benefit driven headline that most Sellers want. This is how I bought subject to properties. Expired listing’s is a great list to buy properties that need little work.
4.You can put ads in Craigslist.com for FREE. I’ve never used it to buy properties but it works well when looking for buyers, renters and Lease Option tenants
Once you’ve done a deal or two you then need to decide how many properties you want to buy. This will also be determined if you’re doing this full time or part time. Write down your goals. If you only want 1 to 5 houses a year you can probably do that with $100.00 dollars a month. If you want 2-4 houses a month than you’ll probably need to spend $1,500.00 a month depending on where you live.
Before you do any marketing you’ll need to figure out who your best prospects are. In other words, who needs what you have to offer. You want to market to prospects who need to sell their home quickly. Like…
Those are just a few to start with. Here’s what I see most investors doing. They get their marketing working, they get a few calls and they find a property that they purchase. They then get so caught up in getting it sold they shut down the marketing to buy properties.
Let me use this analogy… your marketing is like a big Jumbo Jet. The Jet uses an incredible amount of energy to get off the ground, but once flying the plane uses little effort. Your marketing is exactly the same. It will take you approximately a month before you begin to see leads coming in.
So you need to stay consistent with your marketing so the leads will begin to come in on a daily basis. If you shut down the marketing then you’ll have to re-start the process all over again. Once you have it up and running you should never shut it down. That’s why most investors are on what I call a rollercoaster ride.
Here’s the best way to get consistent leads each and every month. Pick your best prospect list. Decide how many properties you want to buy. Then put together a sequential mailing to each prospect list. I suggest at least 3 sequence letters to each list. Let me give you an example…
If you’re mailing to prospects who own multi family properties, I would mail to this list once every 3 months for a total of 4 times a year for the best results. Mailing to a prospect once is the worst thing you can do in business. In order for a prospect to remember you they need to see your marketing at least 7 times. If they need to sell they will respond in most cases within 3 mailings.
You must also never forget to have a compelling reason for your prospects to contact you. The prospect only wants to know “What’s in it for me” You’ll get a much better deal if you get sellers to respond before a realtor’s gets involved.
It’s imperative that you have these 6 Key factors when writing a sales letter or postcard to a seller.
1.A compelling benefit driven headline that gets the reader's attention.
2.All mailings should be personalized. Dear John, Not Dear Homeowner.
3.The body copy must provoke their pain and give them the solution.
4.Must have a P.S. that re-states the benefits to the seller. Why? Because most people go to the end of the letter first to see who wrote it and they read the P.S first.
5.Must have a deadline or a reason for the seller to respond quickly.
You’re wasting your marketing dollar if you send out a letter or postcard that says…I want to buy your house please call me. No, it needs to let the seller know that they need to act NOW otherwise you won’t be able to help them. Some thing like… John my lender has notified me that I can only purchase 4 houses a month due to the credit crunch. I just put 2 under contract last week. If you need to sell your property at 2345 Main Street then I must hear from you immediately. Otherwise you’ll have to sit around another 4-6 months waiting for a qualified buyer.
6.Must have a call to action. Tell the seller what you want them to do. Call you now, go to your website and fill out the form, fax back the enclosed information etc.
Let me give you a quick action formula for getting all the leads you can handle.
1.Put out 25 signs a week.
2.Send letters to expired listing in your specific zip code.
3.Send letters or postcards to pre-foreclosures only in you specific zip code.
4.Get a list of multi family owners and mail a sequence letter to this list every 3 months. This list depending on how many Multi family properties you have in your area can be the entire County. If you have a lot of multi family properties then just choose a zip code.
5.Get a carrier route map and pick out 8 carrier routes in a specific zip code and mail to each one every two weeks. When you finish start over.
6.Get a list of FREE and clear properties and mail to them every 3 months.
Now that you have all the leads you can handle lets go into selling or occupying houses quickly.
Let me say that I do NOT think it’s a good idea to go get hard money loans in our current market. It’s too easy to get seller financing and to take over existing loans “Subject to.” That way you have several ways to sell a property and you’re NOT stuck trying to sell it for all cash as you would be using hard money.
The best ways to sell properties is to buy them right. If you need to sell a property quickly in today’s market, you just need to sell it cheaper than any other comparable home in the area. It also must be in “A” plus condition for this neighborhood. Just understand that it may still take 60-90 days to sell or longer depending on where you live. You’re probably going to want to be at least 5% below recent comparables depending on how quickly you want to sell.
This is why I won’t even consider buying a property without being able to take over the property “Subject to” the existing loan. I also like homes FREE and clear where we can have the seller carry the note until we sell the property within the next 5-10 years. I will NOT buy a property with a balloon payment of less than 3 years unless I’m stealing it at a huge discount.
I had all the sleepless nights that I could handle when I first started investing using hard money. I won’t go down that road again and I don’t think you should either unless you really know your exit strategy and you bought it right.
If you don’t know what subject to investing is, it’s when the seller allows you to take-over the existing debt without paying it off. The seller stays on title until sold sometime in the near future.
This way I have several ways to sell the property. I can sell it for all cash. I can do a Lease Option on the property. I can rent it until the market turns or wholesale it to another investor for quick cash.
Let’s go into how to market your properties to get them filled quickly.
2.Signs work very well.
3.Flat fee listings with realtors.
4.Craigslist.com is a very good source.
5.Letter and Postcards to Renter’s in the area.
Did you know you can get a list of tenants who have a specific income who are now paying close to what you’re asking on a lease to own.
Let me give you an example…
If you just picked up a property with a monthly payment of $1000.00 dollars and you were going to sell it for $125,000.00. You could get a list of all the renters in the area who are now paying $900.00-$1,200.00 a month who make a combined household income of $50,000.00 a year. The only thing you need to do is give the renters all the reasons why it makes sense for them to lease to own rather than throwing their hard earned money away on rent. It comes back to being able to craft a sales letter or postcard that gets prospects to respond.
I had a couple people ask me about doing a Live Webinar on crafting a successful sales letter. If anyone would be interested just email me.
These are the top ways to get properties filled quickly. The worst number in marketing is the number one. You should be using at least 2-3 different ways to bring in leads depending on how many properties you have available.
When you really get good at this business it will be when you already have a good buyers list
Let me give you an example…
When you crank up your marketing to sell properties you will have buyers contacting you to lease to own your properties. If they want a 4 Bed 2 Bath home in a specific neighborhood and can put $7,000 dollars down as a NON refundable deposit. Wouldn’t it be easier to shoot out 2000 postcards to this area knowing you already have a buyer? That’s when the business becomes fun.
This by the way is how you build wealth by not selling everything you get your hands on.
If you don’t know how to buy properties ‘Subject To” you should learn now, because going down to the bank for financing is going to get ugly. Besides you want to be able to buy as many properties as you can locate, NOT how many the bank’s will allow you. That’s what poor people do. They allow others to dictate their lives and income. I suggest you take over as many properties as you can, because when the dust settles 7-10 years from now the investors who acted will be the ones sipping martini’s on easy street.
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"