The most important aspect of real estate investing in my eyes is lead generation, because without leads you will not be able to make any deals. This in turn will lead to no money in your pocket and to the ultimate failure of your real estate investing business.
When I first started in real estate investing, I gave up real quickly because I could not generate leads. After putting up bandit signs and taking them down each weekend, I was not only exhausted, but I did not get any quality leads. I had a few calls, but it was nowhere near the amount of calls that I had wanted or thought I would receive. Now, that is not to say that bandit signs do not work, because they absolutely do!
Bandit Signs
Bandit Signs do work. The success you will receive using bandit signs depends upon location, size, reach, and content.
Location: Your signs need to be where people driving will actually have a chance to read the sign, not just see the sign. I have paid people to put up signs for me and I have never been as mad as I was when I was driving and saw one of my signs on the side of a 55 mph road. There was no stop sign, no stop light, there was no reason why anyone driving on that road should ever see that sign. Clearly the best spots for signs are at 4 way stops that have a lot of traffic. Whether traffic stops for a stop light or a stop sign does not matter that much, but it does make a difference. Think about it! At a stop light everyone stops, the traffic backs up, and then everyone goes at the same time. Hopefully they are all moving slowly at this point. But, if you can find a high congestion four-way stop with stop signs, everyone will see the sign. Every person must stop, then go, then stop, then go; until they actually reach the stop sign. They will have sufficient opportunity to read your sign and write down the number. The key to sign location are high congestion areas, where traffic is forced to stop!
Size: Size is important. If your sign is too small to read from a distance, then the person reading the sign may not have time to get the number, which does you no good. One thing you could also do that may help in this situation is to have a website. In my opinion every real estate investor should have a website. Make your website have a catchy title. It is much easier to remember a catchy title than a phone number, unless your phone number actually does spell something catchy. The point is your sign needs to be big enough so that those driving by will take a few steps; first notice your sign, then read your sign, and then actually write down or memorize the phone number or website.
Reach: By reach I mean your signs need to be everywhere. The point is to have people see your sign all over until a mental image gets burned into the brain. When this happens, you have achieved success with your signs. The more points of contact you have with your potential customer, the more efficient your advertising will become. Next time you are out driving take notice of the bandit signs around town. Then when you get home try and recall as many signs as possible. Which signs have stuck is your mind? I guarantee you it will be the signs you saw multiple times.
Content: This is important and encompasses not only what the sign
reads, but how it is presented. If you are a foreclosure investor,
get signs that say “AVOID FORECLOSURE”. If you are a lease
option investor, get signs that say “We Buy Houses- We Take Over
Payments”. By selecting the proper content, the sign will work
better and you will prescreen your callers by getting signs that meet
the criteria of the deals you like to work. This is not to say that the
standard “WE BUY HOUSES” signs are bad. If you like to work any
type of deal and want lots of calls, this may be a good path for you.
Presentation of the sign involves color and shape. I recently saw
signs near my home that were shaped like houses. This caught my
attention and similar signs may work for your area. People are
starting to become accustomed to signs and not pay attention, but
if your sign looks different, it will catch the eyes of more people.
Whether looking different means using different colors or having
your signs in the shape of a house; you need to do something to
set yourself apart and grab the attention of the people.
Classifieds
The classifieds are another great place to look for leads. There are a few sections in the paper you will want to pay attention to. Namely you want to look in the FSBO section and the For Rent section.
A. FSBO: This section can lead you to good deals by directly contacting the owners. The owners of these houses may not be the best candidates, but if they have been running the same ad for months, they may be willing to take a discount on the home. You can usually go online and view the time length a property has been posted in the classifieds. By doing this, you can weed out the older listings from the new ones, but this is not to say that a newly posted classified does not have a motivated seller behind it. Newly listed homes could have motivated sellers due to a number of things; divorces, bankruptcy, job relocation, are all potential possibilities. Keep your eyes open for key words such as must sell or needs TLC. Also in the FSBO section, keep an eye out for numbers that are out of area. If you see this, you have found a winning ticket. If someone lives out of area they could have moved for a number of reasons but the fact is most people do not want to own homes other than the ones they live in currently. They could have been relocated for a job, gotten a divorce and moved, any number of reasons. If you see a number from an out of town area code, call immediately! Chances are that the person on the other end of the line is a very motivated seller.
B. For Rent: In the For Rent section you will find a lot of disgruntled landlords. Some landlords even have places you might be able to take over with existing positive cash flows, but the landlord is just tired of being a landlord. If you can find a good lead in this section you may be able to get more than one home in a bulk deal. This is a great place to look for leads. Just call the landlord and start talking, more often then not they will speak candidly and you will have a great lead. If you dedicate a few hours one day a week to calling on landlords, I can almost assure you of a deal. This does not take a large commitment of time, and no costs other than a phone line. I encourage you to try this technique for a month and test your results. As time passes and you keep good records, this technique will become something you can use quickly and at very little cost to yourself.
6- Direct Mail
Direct mail campaigns WORK. The problem is that you need to have some money to begin mailing potential leads. As real estate investors, especially getting started in this business, money is usually a problem. But when you have some money saved up direct mail can get people to call you! Getting people to call you is a great thing! If the person on the other end is calling you then they have taken the first step and are automatically at least somewhat motivated. When you have a motivated seller you are a lot closer to having a potential deal. Now where do you get these leads? Well, from a number of sources (which can also generate general leads). You can get leads from the courthouse, local paper, list service providers, MLS, probate court, there are tons of ways to get leads that would be great candidates for a direct mail campaign. It is also important what type of advertising you use when doing direct mail. Do you send a postcard or an envelope? I would try both and see which gets a better response. When using an envelope be sure that everything on the envelope is hand written. This makes the letter more personal and more likely to be opened. You can hire someone to do this for you. A great source would be a college student and have it be a paid internship. Of course they can do lots of other great things for you besides addressing envelopes as well. In my recent talks with an investor he mentioned something that blew me away. If you know a particular home that is going into foreclosure and you want to target the specific home. You can go to Wal-Mart I believe and make a personalized postcard. You can even put a picture of the home on the front and have it say “I buy homes just like this”. Now if that won’t get your phone to ring I do not know what will. Obviously you cannot do this to the masses but if you can target specific homes this may be very useful for you.
7- Housing Court
This is a great source for motivated sellers. Make some calls and find out where you have to file for an eviction of a tenant (if you do not already know). This is a great place because if someone is being evicted, then they are not paying rent. If the tenant is not paying rent, the landlord still has to pay the monthly mortgage. And finally, if you have a landlord not able to make a monthly mortgage payment, I would say you potentially have a motivated seller. Call these people and start talking to them about their house or building. Say you were driving by, liked the house, and asked the tenant for the number. I don’t know where the conversation will go, but you can easily come up with an excuse to start talking about the property. Right away you should be able to tell if they are a motivated seller. A lot of times you can tell by the tone in their voice. If you do have a potential motivated seller, mention that you are interested in purchasing the property. Be up front with the landlord and you will achieve greater success. This one technique can be great because you may have a landlord on the other end that is tired of being a landlord. If this is the case you might be able to get multiple units with just one simple phone call.
These are just a few of the ways to get good, qualified leads for your real estate investing business. The important thing is that you get leads from multiple sources. If you have only one way of getting good leads and that source stops to produce, you are out of luck. But if you have 20 ways of generating leads and one source stops producing, your business will continue and eventually you will be able to replenish that source or get a new source.
There are many great ways to generate leads other than those described above. To find more lead generation techniques as well as other real estate investing techniques and strategies visit us @ http://www.reaudiotips.com.
Ross Treakle is a Internet Marketer and Real Estate Investor who has recently strived to deliver quality content to real estate investors via the internet. Ross has set out to interview successful real estate investors and deliver those interviews to his subscribers at no cost through his website http://www.reaudiotips.com. If you are interested in real estate investing you do not want to miss out on this invaluable asset to your business and success. Please visit us at http://www.reaudiotips.com.