by Lou Castillo

You want to have a lot of leads and your marketing will bring them to you. Drive those leads into a local number even if you are not local to them. They are going feel secure. The prospect list that you are mailing to is going to feel more secure if they are calling a local number than if they are calling an 800 number. The perception of an 800 number is that it is a big company, but if it is a local number then it just must be the guy down the street that buys houses.

I also recommend using an answering service. If you have people go to voicemail you will lose 50% of your callers. Understand that motivated sellers are really hoping that nobody is there that way they can say well I called but nobody answered the phone. You have to have a live person answering the call. If you have a voicemail 50% of them will not leave a message. The other thing about an answering service is you are going to get seller phone calls at all times of the day and the night. And it’s not always going to be the most convenient time for you. You could be at a nice restaurant and all of a sudden you get this seller call and it is just not going to be appropriate. Or like me, I’m working on something and all of a sudden I get a seller call and it is hard to switch your mental thought process to get ready for this seller call. It is easier if somebody else answers it. One great answering service I recommend to my students is weanswer.com.

What you do is give them your script of questions you’d like to be answered. A live person will answer the phone as if they are your company. In other words, let’s say that you are Mike Buys Houses. They will answer the phone Mike Buys Houses how may I help you? “Um yeah can I speak to Mike?” They will take the information for you and ask the questions that you have in your script then e-mail you the details. Then you can call them back at your convenience. Even if you are going to call them back right away what an advantage it is to already have that information. Now you have the address so you can go in and pull comps before you call them back and know what the property is worth. You can figure out how much you think you might be able to offer for the property before speaking with them. The only thing that is going to be missing for you is repairs which you will get from them when you start talking to them. You can formulate your plan even before you get on the phone with them.

Remember when you get on the phone what your purpose is. The purpose at this point is not to try to sell your service to them. It is not to buy the house. The first purpose of the phone call is to prequalify the caller. Remember I told you you have prospects versus leads. You want to now separate the prospects from the leads. They are all leads coming in but what you want to separate is the tire kickers from the ones that are real motivated sellers. And that prequalification process should take no more than 5-10 minutes on the phone. What you are looking for is the answer to two questions.

First, are they motivated and second are the numbers going to work? Unfortunately you can’t say are you motivated to sell your house. You are going to have to build some rapport with them and find out from the questions you are asking what kind of motivation is there. Why is it that they are looking to sell there house right now? How soon do they need to move out? The biggest indication to me as to whether they are motivated is when I start asking some of the personal questions. How much do they owe on their house and I throw out some lowball prices. When they just laugh at me and they almost don’t want to continue on then I know that this person is not really all that motivated. When I explain why I need this information or I explain why my price came in so low and they say “let’s go on” I know I have a motivated seller.

The next question is; Are the numbers even going to work? Are we playing in the same ball park? I don’t have to zero in on the number yet, but I need to get an idea. If I can only pay $150,000, but they owe $250,000, then we aren’t even in the same ballpark. Or if they are adamant that they have to get at least 200 and I am at 150 well we are pretty far apart. If I can’t get them off that number then why go forward, because I don’t want to spend an hour with each caller. The first five or ten minutes is just about deciding whether I want to move forward with this caller or not. If they are motivated then I will spend an hour, hour and a half with this person really building a rapport. I will go as far as making some ballpark offers based on what I already know from the comps and from what they told me about the house. I ask them some questions about the house and based on what they told me give them a ballpark on what repairs will cost. I will give them a ballpark offer if they seem flexible, if it seems like something that they want, I will go to the next step. If it is a local house then go out and visit it and if you are working out of a different city then certainly you have somebody on the ground that you are working with. Don’t send your eyes on the ground to every house only to the ones where it looks like there is really going to be a deal.

If you handle your incoming leads that way then you won’t find your incoming leads to be overwhelming. So many investors complain about having too many leads coming in. You know I have 60 leads coming in I can’t spend an hour on the phone with each one of these leads. What you want to do is prequalify and find out which ones of are motivated and will turn into a deal. That is where you want to spend your time anyway right? You don’t want to spend your time with a tire kicker. You want to spend your time with somebody who actually has a deal.

by Dennis Henson

There are many ways to market single family homes and I have more than forty of these ways in my arsenal. But the most productive marketing technique by far is the use of an 800 number.

Why is using an 800 number so powerful? Here are a dozen reasons…

Instant Buyers or Renters — The most important reason that 800 numbers are so powerful for real estate investors is that they can provide you with a fresh list of ready buyers or renters. Current technology will allow you to use an 800 number to capture a continuous stream of buyers and renters for your properties. Having this stream of anxious buyers is invaluable when you find yourself with one or more empty homes because empty homes are very expensive. Having a list of fresh prospects is a great way to get your homes filled quickly.

Convenience — If you’re selling or renting a home, you definitely need a toll-free number to capture your prospects number so that you may contact them at your leisure. With an 800 service, you can accept calls 24 hours a day 7 days a week and the best part is that you never have to answer any of the calls. Because the 800 service captures and reports the numbers to you–so that you may return the call when you need to rent or sell a home.

Credibility — People looking to find a home want to work with a trustworthy company and there’s hardly a better way to establish a large, trustworthy presence than promoting your 800 number. Even if you work from a spare bedroom in your home, consumers often assume that an 800 number is associated with a large company.

Prestige — Your 800 number puts you in the same league with some of the most prestigious companies.

Customer Satisfaction — In the buyers mind, you’re convenient and thoughtful and they will love the fact that they can call your 800 number–toll free and find the needed information at any time day or night.

Higher Response Rate — A recent study revealed that 800 numbers improved consumer call rates in print media by 84% versus non-toll-free numbers. The response rate is definitely much higher when advertising homes with a toll-free number, than when just advertised with a standard business toll line.

800 Numbers Payoff — If you haven’t used an 800 number before you may think cost will be prohibitive. But surprisingly they are quite inexpensive and if you already have one you probably would not easily give it up. The reason you would want to hold on is increased profitability. Advertising costs money too, but people do it because the numbers make sense. The same is true with an 800 number. They can and will increase your profitability. When you measure the increased effectiveness of your advertising, you’ll realize that the nominal costs of using an 800 number is worth the price.

Confusion-Free Calling — As more and more area codes are introduced around the country, buyers are unsure of where their calls are going – and how much they will cost. 800 numbers assure the buyer that no matter where they’re calling from, the call will be safe and free.

“800″ Means “Toll-Free” — To the home buyer the terms “toll-free” and “800” are one and the same. A recent study found that 95% of consumers recognize the 800 exchange as toll-free, but few connected with the other toll-free exchanges like 888, 877 and 866. These numbers are often confused with area codes and where consumers are concerned, confusion usually means lost sales. However, these “new” exhanges are gaining popularity and recongition among consumers and businesses.

“800″ is the Most Widely Recognized Toll-free Prefix — Test results confirm that 800 is by far the most widely recognized toll-free prefix among consumers, with a 94% recognition rate. Recognition of the 800 prefix is consistent from 2002 to 2007.

Your 800 Number Stays Active Even if You Move — As your real estate business grows you may need to move to a larger facility. When you move it might not be possible to keep your standard phone number. Buyers who call your old number will probably reach a disconnected line or a recording. This is bad business and sending out postcards with the new number will cost you money and you probably can’t reach all of your potential customers. But an 800 number continues to work regardless of where you locate your business. You can even move from one state to another and your 800 number will remain the same.

The Customer’s Choice — When given a choice, consumers prefer to use a toll-free 800 number to reach your real estate business.

I hope this article will help you in your quest to build wealth through real estate investing.

by Scott Rister

Did you just hear about the investor in your local RE club that closed on a deal netting them $15,000 and they didn’t even have to lay a hand on the property? Or what about the person that just bought that rental house on the same block for 30-50% less that what you paid for yours? Are you at the point of scratching your head and thinking they’re just lucky? Or probably that’s all they do and just don’t have a life outside of real estate….right?

Somewhere in between total luck and absolute sell-out hours chasing deals is where you should be in finding truly motivated sellers, or rather having them finding you. It’s a weird coincidence that the smarter I work, the luckier I get finding great deals. Did you catch that? It’s not always about how many hours you put into real estate and how hard you work at your marketing program that produces the best results which is finding great deals that puts money in your pocket and that’s what real estate investing is all about.

Let me share with you some simple principles in marketing for the independent real estate investor. You may already be in tune with some of these, but let’s all take a pulse-check here and make sure we’re on the right track.

1) What Are You Hunting?

I’m asking what types of properties and real estate opportunities are you seeking? The more narrow your focus and marketing efforts can become to a target group, the greater success you will experience. If you are seeking wholesale opportunities, then you will not gain very much success putting out “I Buy House/Lease Option” bandit signs next to established neighborhoods. In addition, you will not gain a favorable response direct mailing to preforeclosure prospects if the primary weapon in your arsenal is cash-only deals with hard money lenders that don’t go above 70% LTV.

The marketing medium you use and the message you accompany with it that hits the right target market turns sellers into motivated sellers. There simply is no generic marketing message and medium that is a “one-size-fits-all” approach in real estate.

2) Just How Much Money Can You Spend?

Now, we’re talking about something that hits home real fast when it’s about coming out of pocket with hard-earned money in the “hope” that it will come back to you in the form of truly motivated sellers. If you’re first starting out in real estate investing then it’s imperative that you have a short-term budget to work within so that you’re not forgetting about paying for all the other necessities in life: food, shelter clothing!

You simply DO NOT have to have a large marketing budget to be effective to grow your RE business. One §.34 postcard netted me §8,400, so it’s all about hitting your target market as explained in #1. However, be realistic about what monetary constraints you have and how to incrementally build your marketing program as you experience more and more success.

3) Track Your Results!

Oh, we miss the boat on this one so much. When you are incorporating bandit signs, direct mail, flyer campaigns, etc… it can start to get confusing where and if your success rate justifies the marketing mediums you are using. Tracking your responses and closures of deals is necessary so that you can identify areas that need to be tweaked or worked on. Most importantly though when you find out that great mailing list is really working or the flyers in a particular neighborhood is getting tremendous feedback….then go in for the kill! I mean when you are measuring success and can track it effectively it allows you in full financial confidence to justify increase in marketing expenditures for areas that are producing the results desired.

My hope is for you to realize that marketing to the real estate investor is the lifeblood of his/her business. Great deals rarely come knock on your door to find you. They find you when you have a marketing system implemented that is like a funnel prescreening sellers for motivation and directs them to then contact you immediately.

by Bill Bronchick

A question often asked when incorporating is, “where do I incorporate?” There are many promoters of various jurisdictions, such as Delaware and Nevada and even offshore.

Nevada and Delaware have favorable corporate laws which limited the liability of Directors. As you may know, corporate directors are often sued for breach of fiduciary duty. Since the law applied in the case of a lawsuit involving the internal workings of a corporation is the state of formation, DE and NV offer maximum protection from director liability. Nevada is a particularly favorable jurisdiction because it has no personal or corporate state income tax. Shareholder privacy is protected in NV because there are no state corporate income tax returns filed and no information sharing with the IRS.

In most cases, the benefits described above will not apply to your decision to incorporate, since you will be doing in business in your own state. If your corporation does business in your own state, it must register as a “foreign” corporation with your Secretary of State. This involves paying an annual fee in both the state of incorporation and your home state. In some states, such as Texas, the filing fee for a foreign entity is substantially higher than a domestic corporation.

In addition, income earned in your home state is taxable and the corporation must file a tax return. You cannot earn income in a foreign state with a Nevada corporation and expect to avoid paying income tax there. And, once you file a tax return there, this will require revealing the identity of the shareholders.

The only remaining benefit will be limited director liability, which is little consequence if your corporation is made up of you, yourself and you. Thus, in most cases, your best choice for incorporating your small business is your home state.

So why do radio advertisements push Nevada and Delaware corporations as the place for everyone to incorporate?

Take a wild guess!

by Vena Jones-Cox

I’ve been asked if you give someone a life estate, do they have the right to do anything they wish with the property, such as move out and rent it for income? What are an owners rights to the property after they have given someone else a life estate on it? ( such as: are they allowed to go on the property for inspection to make sure the property is maintained and kept up?)

A life estate is a form of interest in a property that allows the person with the life estate to retain full interest in the property until their death, but vests legal title in another person. It is most commonly used when an elderly parent wants to transfer their home to a child before their death, but wants to continue to occupy the property until that time. But it’s also a great, creative way to put together deals with older sellers who want to pull the cash out of their home but have the right to live in it until the end.

Yes, the holder of the life estate has the right to lease—or even sell—the property subject to the life estate. In other words, the tenant or buyer gets the rights to the property only for the lifetime of the person to whom the life estate has been granted. And yes, the owner of record (you) has the right to enter the property for the purpose of inspection with notice and at reasonable intervals. If the “life tenant” (as the holder of the life estate is called) isn’t maintaining the property, or is doing anything that will permanently damage the value of the property, the remainderman (you) can sue the life tenant for damages. You, however, are the one ultimately responsible for paying taxes, insurance, assessments, and so on.

Granting someone a life estate on a property that you intend to eventually make a profit on is clearly a risky proposition. It’s entirely possible that the holder of the estate could outlive you, or outlive the usefulness of the property to you. Remember Jeanne Calment, the French woman who lived to be 122? In her 80s, she sold her apartment to Andre-Francois Raffray, who gave her a life estate and promised to pay her $500 per month until her death. By the time of his death in 1995, he had paid twice the market value of the property. Her comment: “Sometimes in life, you make a bad deal”.

Perhaps of greater concern to you is the possibility that the expenses that you pay on the property might exceed the value of the property by the time you actually get possession. For this reason, you need to put pencil to paper before making an offer and figure out exactly what will happen if the life tenant lives 5 years, 10 years, 20 years, or until he’s 122. In all likelihood, you will discover that your offer will need to be even more below-market than usual—possibly as little as 20-30% of the as-is value.

By the way, there are 2 other strategies that might be better suited to your ends. One is called an Estate for Years, which grants the seller an ownership interest in the property through a certain date—which can be as long as makes the seller comfortable, and gives you the ability to plan when you will get ownership. You can then agree on the price of the property based on the length of the period. The other is a reverse mortgage, where instead of paying the owner a lump sum for the property, you make him monthly payments for some period while he continues to live in the property. Either of these should meet an elderly seller’s need to continue on in his home while receiving an income for it.

by Bill Bronchick
If you have been reading my articles, you are probably familiar with the concept of creating and using land trusts for privacy and protection of your real estate. However, what about your ownership of notes, mortgages, deeds of trust, leases and options that may appear on public record? What about cars, boats, mobile homes and other items that are registered and recorded in public places? Good news . . . there is a special trust just for that purpose!

The "Personal Property Trust" agreement is basically the same as a land trust in that the trustee is essentially a nominee title-holder acting at your direction. Like the land trust, the paper trust is a revocable, living trust. The same rules for tax reporting apply - there is no gift tax or income tax consequence of placing title to your paper in the paper trust. You still retain full control of your trustee, so no fiduciary tax return is required.

Like the land trust, the primary purpose of using the personal property trust is to keep your name off the public records. Let's examine a few documents that are generally recorded and how we can use them with the personal property trust:

Purchase Option

A purchase option is often recorded in the public records to give notice to the world that you have first crack at the property. Again, using a trust as the named "optionee" will protect your anonymity. Furthermore, it may be an excellent tool for confusing potential creditors; you record options a gainst your property in favor of the name of a trust. To theoutside world, your property looks less valuable, because, after all, who would purchase a property subject to the recorded options (nobody but you has to know that your are the beneficiary of the trust and thus the "true" option holder!).

Mortgage or Deed of Trust

One of the most practical uses of a trust is for holding a mortgage or deed of trust. A mortgage is an asset, like any other, that can be found by searching the public records. Using separate trusts for each mortgage will help you keep a low profile. As in the above example, you could record mortgages against your properties in the name of a trust to make your property appear encumbered. Make certain that there is at least some consideration for the mortgage or you may be found guilty of filing a fraudulent document.

Auto or Mobile Home

Essentially any asset that is recorded in public records can he held in the name of a nominee-type trust. Department of Motor Vehicle records are often public information and will let everyone know where you live. Holding your car or mobile title in the name of a trust with a post office box or business address will help protect your privacy.

LLC Interest

The names of the members of a limited liability company are public record for everyone to see. Consider forming your LLC using a personal property trust as the member (you being the beneficiary of the trust).

Trust "Stacking"

You can combine a personal property trust with a land trust for greater privacy. Since the beneficial interest in a land trust is personal property, it can be held in the name of a personal property trust. Thus, you could form a self-settled personal property trust of which you would be the grantor and beneficiary. The personal property trust would then create a self-settled land trust of which it would be the grantor and beneficiary. This "stacking" of trusts might be appropriate in states which require the public disclosure of the grantor (HI, MS and AZ) or in situations which an uncooperative lender or title company insists on such disclosure in writing.

by Dan Auito

A thriving real estate investor or retailer solves a lot of other people’s problems; that’s how you become successful. The more knowledge, ability, experience, contacts, and resources you have, the more solutions you can begin to offer people in solving their problems. In addition to this, you will be ahead of the pack if you can get people calling or coming to you with their specific problem first. That means you have to advertise the fact that you are in a position to help while being fair, trustworthy, and accurate in making quick decisions before the competition tries to persuade these people first.

For the above reason alone — competition — you will need to understand marketing. That means deciding on what you are going to specialize in, developing a method to define your target audience, and then attracting them with a well-written message using the different types of media to get the word out. That last paragraph brings up a good point: What exactly do you want to specialize in? Following are some categories from which to choose:

* Condos, vacation property

* Single-family homes

* Apartments for one to four families (residential duplex, triplex, fourplex)

* Commercial— hotels/motels, strip malls, office complexes, mobile home parks, storage units, parking lots, garages, restaurants, stores, apartments for five or more families, and so forth

* Industrial—factories, refineries, manufacturing plants, and so forth

* Farms—commercial, industrial, or agricultural, depending on zoning

* Raw land—lots, vacation, recreational, sub-dividable residential, commercial, industrial, agricultural, and special purpose

* Special purpose—churches, schools, hospitals, power plants, theaters, sports arenas, golf courses, marinas, and so forth

# Here are some examples of how you might go about finding some good deals:Look at bulletin boards, local papers and small independent publications. This goes for every publication you get. Make sure you get one of the first copies off the press. Go to the facility that houses the presses and get your copy before the ink has a chance to dry. Let no one beat you to the punch.
Better yet, advertise yourself and get people who are thinking about selling to call you before they actually tell the world through an ad.

# Look at the legal section of the newspapers. Contact heirs and attorneys, and sales in the garage or estate sale sections. Also, 20 percent of people who have garage sales are planning on moving soon. Ask about their house or their neighbor’s homes. Always keep your antenna up! Your odds of success increase when you choose large population centers and remain in the market constantly on the lookout for your type of deal.

# Look for vacant houses that are run down, fire damaged, or abandoned, with city notices evident. Talk to the neighbors of these homes. They usually know who owns it and what is going on. They have an interest in seeing it restored to beauty. It sure is a shame you can’t look in the mailbox to see who is receiving mail at the property in question—wouldn’t that be easy? Walk up to a property and look in a window to confirm that it is indeed vacant—but don’t endanger yourself by getting bit or shot! Use common sense. Contact out-of-state owners through property records or by letter and/or phone. Leave your cards on the door.

# OREO stands for Other Real Estate Owned. Make friends with your local lenders and let them know you are the one to call when they have a foreclosure looming or in progress. Hint: If you prequalify with lenders beforehand, they may call you sooner.

# Watch the local paper for foreclosure auctions, tax sales, and HUD and VA listed properties. Note: Auctions held in bad weather where the property absolutely must be sold are your best chance to limit competition and get property at rock-bottom prices. Because there is no low limit on what can be accepted (no reserve) you may win big.

# Real estate agents are going to try to sell you something! When you approach them be very specific with them and tell them to call only if they have an absolute steal. Ask agents to give you those expired listings since they couldn’t sell them. Suggest a 2 percent commission if they will assist with closing the paperwork after you make the deal with the seller on your own.

# Don’t be so selective. If the property is an absolute steal, lock it up and sell it to somebody who does like to work with that type of real estate. Get the option and hand it off to another buyer. Look for distressed sellers in addition to distressed property.

# Post fliers everywhere—colleges, Laundromats, shopping centers, bowling alleys, public bulletin boards, churches, local businesses, wherever large numbers of people congregate. Give them a chance to give you a lead on a hot deal. (For example, print up cards that say “I pay $500 to you at closing if I buy a house that you told me about! Do you know anyone who is selling property? Please call [your name] at 555-1212.”) Print quality business cards.

# Join organizations of all types. The sky is the limit. There are so many—just pick the ones that you would be interested in truly being a member in and let it be known you pay bounties for consummated (closed) deals.

# When you use headhunters, leave out no one. Property managers, moving companies, relocation services, neighbors, landlords, tenants, the mailman, the paper boy, gardeners, landscapers, service technicians, pest control people, friends, acquaintances, relatives, and other investors. You name it!

# Everyone should know they can make $500 if you end up buying a property they tell you about. Enlist your army! Give each of your soldier’s stacks of your cards for exponential growth.

# A special note: Water, gas, and electric company personnel who shut off utility meters can be very good bird dogs when it comes to finding property that is in trouble or vacant. Make sure they have your cards.

# Have at least 10,000 business cards printed with your offer of the $500 bounty and hand them out in stacks to everyone you can.
As you grow, you might consider TV, radio, phone books, billboards, street benches, bumper stickers, and bigger commissions. Use your imagination.

# Put up signs telling people you buy real estate.

# Make multiple lowball offers on overpriced properties and walk away. Don’t deposit earnest money but they may stew on your offer and call you a month later accepting your deal. Leave the offer with them.

# Older people should not be left out. They are very valuable informants. They know everything and need people to talk to! Listen to them. Go to free seminars on real estate. Do this not only to learn about real estate but also to capture names and circulate among real estate–minded people. Once you have their names, call your own club meeting and network to prosperity. Find your mentor here.

# Go to where people are buying those “by owner” signs. Ask them what they are selling. Follow them home and get the first look! Be first or lose the deal.

# Try offering 15 percent less than what you intend on paying. You never know; they may accept it. If they don’t, you can still negotiate up to 15 percent more and get it for what you originally were willing to pay. If it’s any higher, walk away but leave the offer on the table (the offer stands).

# Make your offer easy for the seller to understand. Get the option to buy but use a contingency to protect yourself. Iron out the details later but lock it up now!

# Buy from sellers who tend not to care: seized, foreclosed, tax sales, corporations, nonprofits, disinterested heirs, probate attorneys, and private auctions.

# Try just helping someone to sell his or her property even if you don’t want it. Be a friend and offer to help for nothing in return. You will be amazed at what happens when you sincerely try to help with no thought in mind of making money. This is a magic bullet in disguise.
Those are some of the basics of advertising and finding the opportunities to buy real estate below market. The old saying goes: You make your profit when you buy, not when you sell. (20 percent off retail, minimum).

by Peter Conti

You can make a profit from the deals you find, even when the deals aren't a fit for your real estate business. Here are five tips to make sure you get paid for your time.

1. Sign Up the Deal!

This is the most obvious way to profit from every appointment you make.

2. Turn Your "Junk" Into Gold

Take the people you meet who just are not a fit for you and refer them to people in your network who can profit by the referral. This builds value into your referral network. For example: You meet with a seller who really would do better to refinance the house. You simply say, "I can see it's not a fit for me to buy this house. Your best option really is for you to refinance the property. Here's the number of a great mortgage broker I know [give him the number], and if I remember, I'll ask her to give you a call next week to see if she can help out." Then pass the seller's name and phone number on to your mortgage broker. Over time this will encourage your mortgage broker contact to pass leads to you, such as buyers whose loan fell through. There is a motivated seller now!

3. Get Information on Local Market Conditions

Use the meeting to get information for the resale market and for the rental market. Find out:

What are rental and resale prices like?

How long are properties staying on the market?

What types of properties are most in demand and what types are least in demand?

What is the perceived market conditions according to the sellers?

4. Learn From the Appointment

This is the ultimate way to leverage yourself. What went well with the appointment? What will you do differently next time as a result of what you learned on this appointment? Make sure you take five minutes and debrief yourself in writing!

5. Future Deals

Follow-up, follow-up, and follow-up with all of these sellers.

by Scott Rister

Scenario:
You get that first magical list that you anticipate as being the answer to finding truly motivated sellers. It doesn’t even dawn on you the hours you spend typing up the letters because you’re so focused on all the great deals to be made. It seems like the letters are just burning a hole in your hand by the time you get the stamps on them and to the post office. Next week rolls around and your hopes were just about dashed by the time got that first call from a seller who received one of your letters. Now we’re talking! It becomes obvious shortly into the conversation they’re just “fishing” around and trying to find just how much you would pay for their property and no they are not in any hurry to sell. What happened? Why didn’t you get more calls from truly motivated sellers? Everything you heard about direct mail in real estate was that this is the way to go in having a system set up for motivated sellers to find you.

The “Real World”

After you’ve read the above scenario know just two things right now:
Many new investors using direct mail without guidance sometimes experience these types of results and get discouraged from using direct mail again. These individuals will tell you, “oh, I tried mailing out letters and postcards once but I didn’t get many (or any) deals”.

Direct Mail Finds Truly Motivated Sellers!!

Now, this latter statement is what I hope by the time you finish reading my points will convince you that a well thought out direct mail plan is extremely effective but takes some thought on your part. You need to be more sophisticated than just throwing darts in the dark hoping you hit something. Sure, the majority of your letters/postcards won’t be responded but did you know that a success rate of substantially less than 1½ can still make direct mail very profitable for you in real estate. Read on my friend!

What Makes A Great Direct Mail Campaign?

Now let’s get into what you really need to know in starting your direct mail campaign. Get a organized game-plan together on how you are going to make sure that you get as many motivated sellers calling you as you can handle!

Define Your Target Market

You need to know what you’re hunting so to speak. Just an “I Buy Houses” message to your market doesn’t come close to what you need to do in direct mail. There are many, many ways to make money in real estate and finding the truly motivated sellers with direct mail means your message should be reflective of the target market you are seeking. For example if you are targeting pretty house properties that are in pre-foreclosure then included in your message the seller doesn’t need to know you take over properties with tenant terrors or that buy junker houses. They need to be informed that you can possibly take over their payments and know how to find tenant buyers that will help resolve their situation so they can move on with their lives. Define your target market because the message you send needs to reflect accordingly.

Generate Your Mailing Lists From Quality Sources

I’ve seen many types of mailing lists that weren’t worth the paper they were printed on. If you’re keying into pre-foreclosure properties then make sure the source providing the information is reputable and you can test out on a month or two basis before being tied into a one year contract or paid up front fee. Later when you find out the information is out-dated and inaccurate then you’re stuck.

Another example is you may be into finding absentee owners. These are a great source of deals if done correctly and basically these are owners of a property where the tax bill is being sent to an address different than the subject property. Ninety nine times out of a hundred that is a prime target for a tired landlord or junker deals to be made. However, it can be quite frustrating when you find out the information you purchased hasn’t been updated for over a year on the property tax records. Ouch! Come to find out after doing a little investigating almost half the properties you would have been sending letters/postcards to changed ownership. You paid for but didn’t receive quality information. Make sure before you buy mailing list or property tax information that you have a chance to do a test basis on some of the material. Most all reputable companies selling quality information will have no problem sending you a small bit of test data to look over.

Don’t Stop At One Mailing

This is a key principle that many investors seem to never grasp the concept of. If you have fulfilled the prior two steps in securing quality mailing list material and you know exactly your target market, then send them multiple mailings. I have my software system set up where for example any category that I key into will receive letters and postcards from me. The text messages will be incremental in nature building up and playing on different angles and ideals trying to prompt them to call me. Sure, I’ll get most responses from the initial mailing but many times it may take a little bit more persistency to get the seller persuaded. I’m glad I didn’t stop with one seller sending out only five letters. On the sixth letter we finally put together a deal and netted me over $8,000 quick cash. With another seller it was actually over a year of mailings before he came around but the deal got done.

Let Your Letter And System Pre-Screen The Sellers

Time is my most important commodity. I don’t have the time to talk to unmotivated inflexible sellers wanting all cash and retail value for their property. You don’t and won’t have the time to waste either with these types of sellers. Sure, some will get in under the radar but for the vast majority of the sellers that receive your message they will know a few things very quickly. You are an investor and expect to make a profit and yes you have many creative ways to buy properties. In fact you can probably even close within 48 hours if you run through your due diligence checklist. However, the message in your letters/postcards needs to state that if they need all cash and full retail value not to call you. However, if they have some considerable degree of flexibility in either the cash price or terms then to call you as soon as possible. You need to be seeking quality of sellers and not quantity of sellers fielding fruitless phone conversations.

Direct Mail Is A Investment…Not An Expense

Make no mistake it does cost money to initiate and maintain an effective direct mail campaign. When you put together the cost of postage, letters, envelopes, postcards then you’re talking substantial monies dedicated to this marketing medium. In a prudent investor’s budgetary considerations these are costs that most like to consider. When you’re experiencing success and know how to effectively secure quality mailing lists or generate them yourself then you soon change your mindset that you simply can not spend enough on postage. Let me try to explain from the sense that just because you don’t like to spend gas for your car should mean that you don’t ever put gas in it. If you don’t realize that fact then you aren’t going to be going anywhere fast and you can make the same comparisons if you don’t consider direct mail costs as an investment in your real estate business.

Summing It All Up

Direct mail is one of the best ways to find motivated sellers or rather have them find you but take some time and forethought from thought to finish on what you’re trying to accomplish. Your goal is to find truly profitable deals and the means you go about doing this are contingent upon your target market, quality of the mailing contact, multiple messages to same contact, pre-screening ability, and finally your commitment to direct mail and an investment in your real estate business. Be organized and focused in your direct mail campaign and soon you too will be finding all the motivated sellers you can handle!