Real Estate Marketing Campaign

Q: I have sent out postcards to my list of 600 twice a month every month for the past four months, but I am not finding any deals. Can you help me?

A: Let's take a look at what you are doing, and see where we can improve your response and conversion rates.

First, let's look at your market. Why did you select this market? Are other buyers and investors purchasing property in this market? Is there job growth and a strong economy? Is it close to the employment center? Is the population growing there? Is the neighborhood safe and desirable? What are the demographics? What portion of the residents are owners? renters? If you are wholesaling, do you have cash buyers willing to invest in this market?

Let's say you have done the research of my previous blog, and have decided to invest in one of the hottest zip codes in Washington state.

600 is a good size for a mailing to test your market, medium and message. A good response rate would be 1-2% on each mailing; in this case, that would be 6-12 responses to each mailing. A response might be, "where did you get my contact information? Please remove me from your list!" Another response might be, "Sure, I am interested in selling. What will you give me for my property? I am not going to GIVE it away..." A third response might be, "We just listed this property last week, do you want to see it?" Count each of these as responses, although none of them would qualify as prospects for an investor. Track the number of responses you get.

One of your responses might be "Yes, I was thinking of selling..." and this may or may not be a prospect. What is their motivation for selling? If they are just curious what you would offer, chances are this is not a deal (even though you count this as a response). If they have some financial, medical or other significant motivation, then you have likely just found your first prospect.

Now your challenge will be to convert your prospect into a deal. Remember, it's a numbers game, and you may have to negotiate with several prospects before you are able to finalize a deal. But the more leads you have, the greater your chances of success.

Back to your mailing list: what list did you use to reach your market? is it targeted to the right homeowners to increase the likelihood of the deal you want? For example, if I were looking for a fixer property, I might want to target homeowners who had held their property for 30 years. Or perhaps absentee owners. If I were looking for seller financing, I would want a list of properties with no mortgage. Looking for distressed homeowners? How about targeting recently-divorced owners? And so on...make sure your list matches the properties with the motivation for owners to call you for help.

Now that we have thought about your market, let's consider your medium. Postcards or letters? Handwritten or professionally printed? Bulk rate or pretty stamps? Colorful imagery or plain yellow letters? Test different methods and track your responses.

And finally the message:
What about the wording you are using? Does it compel the reader to action? Does it include multiple ways of contacting you? Can you edit the content to make it more compelling? more personal?

Experiment with different ways of reaching your target audience, and track your results to determine which combination works best for you.

Happy Investing!

Direct Mail Marketing

Want to find great properties to buy?

Then network with a purpose.  Let everyone you know hear about what you are doing. A narrow focus will generate more deals.  If you say you do everything you are just white noise.  Your 30-second elevator speech should explain who you are and what you do, to create exclusivity with a hook. Your goal is to find the most creative deal makers in any crowd.  This works for finding sellers, buyers, properties, and money lenders.

Direct mail is another powerful way to generate leads for real estate investing. It tends to be more expensive than many other methods, but the return is often much greater. There are several caveats and tips in using a direct mail campaign as a primary method to find prospective sellers of investment real estate - most importantly, the message to the market must match what you need.

For example, a simple "handwritten" letter may read something like this:

My name is Angelique, my husband and I are looking to buy a house.  If you want FULL PRICE for your home, please call xxx-xxx-xxxx. Get full retail.  

Thanks, Angelique 

Ps. Looking forward to your call.   

Each letter should contain a "hook," and a call to action. If the investor has a real estate license that should be disclosed, but make it clear that buying rather than listing is the intent here.

The best responses tend to come from letters sent in invitation- rather than business-size envelopes. The envelope should be hand written, with a crooked stamp, for best results.  It helps to mail more frequently to a smaller list. For example, send a letter every 5 days,  for a total of 7 times (35 days). These might be four yellow letters with slightly different wording each time, perhaps one simple postcard, one hand written memo, and one traditional letter typed.

If the investor is looking for seller financing, it would be good to do a search of prospects using the following terms on multiple listing services, or online websites such as Zillow, Craigslist, and FSBO.com:

"Owner terms" "creative" "finance""seller terms" "owner finance" "owner will carry" "owners do finance" "monthly" "motivated""bring" "lease option" "take over" "to own" "two tax" "three tax" "four tax" "two lots" "three lots" "four lots""two parcels""three parcels" "four parcels" "No low ball offers, no brokers, serious inquiries"

Use appropriate lists depending on the type of property being searched: are you looking for residential single family? or multifamily? How many units? 

Make sure your list matches the criteria set on property prices. For example, if you are looking for the best rental market you may want to set the maximum price for a single family home as average median price+ $25,000.  Maybe you want a minimum of two bedrooms. Be sure your list contains all of your specific buying criteria.

You may be able to get lists from your local title company, or perhaps from a list purveyor such as ListSource.com

My next blog will focus on making offers.

Happy Holidays! Happy Investing!