August 24, 2010 in Investing In Real Estate
My real estate market is like most other markets. There are a lot of real estate investors that make their living buying and selling property. So naturally, there is a lot of competition when buying investment property. In most cases, these folks have spent a lot of time and money getting their real estate education; most of them belong to their local REIA (real estate investors group) and are considered life long learners. Real estate changes continually so it is imperative that you continue to learn and stay on top of your local market
Using the MLS
A lot of real estate investors use the MLS (Multiple Listing Service) to find deals. They may even have alerts set up on their phones and computers so they will be notified once or twice a day when new listings come out. In my area, this is called the “hot sheet”. If a house hits the market that is really a good deal, it’s not unusual to have multiple offers on it in a very short time. In order to use the MLS you will need to have your real estate license or you will have to develop a relationship with someone that will pass on this information to you. Personally, I don’t like that much competition for deals nor do I intend to get into a bidding war. I typically prefer to use other methods such as direct mail.
Direct Mail Campaigns
When buying investment properties, one of my main sources of leads comes from my direct mail campaigns. I have done these for many years both in my real estate business and in my previous business. There is a statistic that states that someone has to see your offer 9 times before they buy. I don’t know if that is the magic number for real estate, but I do know that the money is in the follow up. I believe that this is where most investors go wrong. They tend to send out a letter or two and then just give up on the process. Using direct mail as a source of leads is a long term strategy.
I have different direct mail campaigns that last different amounts of time. But in general, my campaigns will last a minimum of 16-18 months. This is the length of my probate campaigns. Campaigns that are sent to absentee owners don’t have an “end” date. They are ongoing campaigns. Absentee owners that may not want to sell today, could be in a whole different situation in a year or two from now. The challenge with all direct mail campaigns is keeping the list “clean” and updated. When doing direct mail campaigns for the purpose of buying investment property, you will always need to tailor your campaign to the market and the individuals you are targeting. I will cover direct mail basics in a future article.
One of the best ways of getting leads is through networking. Get out in your community and network with like minded folks. Join your local REIA group and get involved. Most all large cities will have a real estate investors group. Not only will you get a good education in these groups, but this is a great place to buy and sell your deals.
Tell everyone you know about your business. Folks will often find it hard to understand exactly what you do particularly if you are a wholesaler. So, be prepared with a short “blurb” that sums up what you do in a few concise sentences.
Whatever methods you eventually choose, there is success to be found in each one of them. Pick a couple and stick with them until you have mastered those techniques. I firmly believe that having a formal marketing plan and sticking to it is the key to success when buying investment property. Tony Robbins says, “Repetition is the mother of all skill if you want sales success”.