Regardless of whether you’re after short sales or ugly houses, making money in real estate investing begins with leads. Unless you’re just posting bandit signs and waiting for the phone to ring, you should have implemented some type of screening process to get the best possible leads landing on your desk (or calling on the phone).
The better you do at setting up your screening, the more time you’ll have, the less garbage calls you’ll field (which can be painful whether you’re doing it, or paying the bill to have it done), and the more you’ll only be working with potential deals – the dream of all real estate investors.
THE RULE: All leads are not equal, and all phone calls are not leads.
A successful marketing campaign is not one that generates a ton of phone calls. That’s actually just a ton of work. Work is different than business. You’ll find in your real estate investing that some marketing campaigns, like the yellow letter (yellow letters are explained below), will produce huge response rates, but also huge numbers of unqualified calls.
But, marketing in the real estate investing world isn’t only about response rates. We have a unique product which only appeals to a small percentage of sellers. We don’t want to talk to EVERY seller, just the right ones. The good news is that you can tweak the message of high response pieces like the yellow letter to provide exactly what we want…
OUR GOAL: To get as many non-deals to filter THEMSELVES out before we ever need to talk to them. Good marketing will allow people who don’t qualify to do the initial screening for you.
QUICK SIDENOTE TO NEWBIE INVESTORS: Don’t be afraid to lose leads… they’re only leads if they are willing AND able to do business with us. If, however, you want to take every last call to work on your skills talking to sellers… no problem… that’s perfectly OK… just plan on fixing your screening when you’re ready to focus on deals.
If you’re marketing to a demographic group (a bunch of people sharing some characteristic, like having expired listings or notices of default on their mortgages), you are starting the screening process by choosing what type of sellers (this works for buyers too) you want to market to.
From there, your marketing message (which can include the “piece” your sending, like a postcard, or the message you use on a recorded message or on your squeeze pages*) needs to include language to both further the prospect along if they qualify, and to allow the non-deals to disqualify and eliminate themselves.
(* Squeeze Pages are single page websites designed to screen, collect leads, and send them to you. They’re a cornerstone of real estate investing marketing – check out the resource box below for links to my Internet Marketing resources.)
Now, lets jump in to two real-life examples from my business, the post-it note and the yellow letter.
The “UGLY” Post-it Note
One of the things people know me for has been my prolific use of post-it notes. I didn’t invent the idea, but in the real estate investing world I’ve distributed more post-it notes than anybody, and I’ve tested the heck out of them..
The original post-it I used had a very effective, but generic message. It got us TONS of phone calls, and cost a mint for the call handling. Fortunately, the margins in real estate investing are high enough that it worked despite the “breakage” (a term for waste, in this case by having unqualified sellers calling).
There were deals for sure, but also a lot of sellers just looking to save a few bucks on Realtor commissions, or who had thought they had been specifically chosen, maybe because their house was so awesome and valuable (aren’t they all?).
I was specifically looking for houses in need of work to either rehab or flip to wholesale buyers. So I needed deep discounts and poorly maintained homes. Other callers would be wasting their time and mine. Real estate investing doesn’t pay by the hour, so this is less than ideal.
So here’s what I did. I added the following language to the post-it notes, creating what I call my “UGLY” Post-it:
P.S. If you want retail value, we’re not your guys. But, if you want someone to buy your house… (a list of benefits)… then we’re your guys. Contact us now… Can’t get much more to the point. If you want retail, don’t call us.
Why waste the time? Why deal with the uncomfortableness of telling them you want to pay 50 cents on the dollar or lease option their house subject to with no money down?
THE RESULT: It cut our calls in half, with no decrease in viable leads. This was huge, because I was paying a pretty high rate to a call center to process the leads… I only wanted to pay for actual leads, so this saved me a bunch, which means my Return On Investment (ROI) shot up. If you were taking the calls yourself, you just got a big chunk of your time back. Either way, a BIG win.
The Yellow Letter
The “yellow letter” is another top-performing marketing piece for real estate investing. The original yellow letter was created by investors John & Donna MacNeil, and later promoted by investing guru Ron LeGrand and others.
If you haven’t seen it, the yellow letter is a handwritten (or handwritten-looking) letter on yellow legal pad paper. It says something like “My wife Erin and I want to buy your house. Please call us at 555-1212.” If you haven’t seen it before, the yellow letter looks real enough to be creepy. And it does get a lot of calls… like:
* Upset people with bad tempers and foul mouths * Police calling on behalf of little old ladies * A random lead or two… and * Lots of people telling you that their house is NOT for sale
So, how to fix it? Easy… I just added the following to the end of the letter (before the signature and PS): If you don’t respond then I’ll assume your house is not for sale.
THE RESULT: Again, a HUGE drop off in calls, but not in leads. The yellow letter remains a top marketing tool for us, but now we don’t need to field the 70% of the calls who wanted to tell us that their house isn’t for sale.
If you want better efficiency with your time and you want to focus more on business than busy work, then start adding language to your marketing pieces to pre-screen the sellers who you are not going to be able to (or don’t want to) work with.