We all know that small towns operate just a bit differently than your big cities.
Everything is more personal when you’re in a small town and real estate investing in a small town is no different.
Compared to a large city like Dallas or Chicago or Atlanta where multiple investors might be vying for the same property, you don’t normally have that issue when you’re dealing with a smaller city.
What type of relationships are we talking about?
Everyone in town… basically.
Not only do you want to build relationships with realtors, code enforcement officers, and industry-related vendors in the area, but you want locals in the area to know what you do!
Word of mouth goes a LONG way in small towns and your reputation will bring you business if you’re true to your word and have a solid business model.
A key part of your branding needs to be that you’re in the business of solving people’s problems when they’re in a tough spot with their home and that you want to enhance the quality of the neighborhood by fixing up the property and finding a new owner (if you plan on fixing it up that is).
In the real estate investing industry, there’s a stigma that because we’re buying at a discount, that we’re driving home values down in the neighborhood. As you do more deals and show that you’re finding a new homeowner for the property or fixing it up, neighbors will realize the good you’re doing for the community. Once they see how your business works, it’s not uncommon to have word-of-mouth spread far and wide in the community.
Word-of-mouth and referrals will always be warmer leads than direct mail leads… and they’re FREE!
You don’t see this as much in a larger market so take advantage!
If you can get a few more deals a year by building up your reputation in the community and by building solid relationships, it is WORTH IT!
If you’re doing a rehab on a property in a particular area, get some door hangers printed and let neighbors know you’re fixing up the house down the street and let them know to contact you if they know anyone who wants to sell their house as-is and that you would make the process quick and easy for them.
Because of these small town benefits, your marketing budget doesn’t necessarily have to be as high compared to marketing in a large town because of the rapport you’ve built with locals.
Live in a large town? Consider smaller towns just outside the “convenient zone” and become familiar with the properties in the area. Do your due diligence. If it makes sense, try it out for 6 months.
In a hot market like it is right now, finding properties with less competition will benefit you since you won’t be competing with other investors who offer too much for a property.
A small town might just be your answer but remember… things run a bit differently in a small town.