As Jon Iannotti reminds us, marketing strategies are constantly needing to be looked at and updated due to the changing markets and from realing what works and what doesn’t.
Direct mail, yellow letters, post card, and bandit signs are just some of the marketing strategies to try out. Every market is different so be aware of what works best for your business.
Mike: Welcome back to the FlipNerd.com REI Classroom, where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now, let’s meet today’s expert host.
John: Hi, everybody. John Iannotti again and I’m your host today on REI Classroom. Today’s topic is going to be, “Marketing Today.”
Mike: This show was sponsored by PassiveRental.com.
John: Now, the key word there is “today.” A lot of people will teach you how to market techniques that have been used for decades. And some of that stuff works, some of it doesn’t. it depends on the market. It depends on where you’re located in the country. We have to constantly, constantly be tweaking our marketing, whether we’re looking for sellers, we’re looking for buyers or we’re looking for private money. We’re always tweaking our marketing.
Now, I will tell you for probably the last eight, nine years, our number one source of getting seller leads has been calling for sale by owner ads or signs. When we brought that out to the marketplace and the information guys were starting to push that out to all their students, everybody and their brother started calling or sale by owners. Not only investors but real estate agents.
So now, we’ve got 40, 50 people calling the same ad and the first thing a seller says to you is, “Are you an agent? Are you another investor?” So you have to learn how to answer those questions the proper way and get the proper response from the seller.
So they’re not, number one, coming at you angrily. Number two, so they’re willing to work with you. So we teach how to do that with our systems. Now, FSBO calling, what was the holy grail for a long time. Today, it’s not because of what I just explained to you. Everybody and their brother are calling these for sale by owner ads. So what we teach is to call FSBOs. They’re number one. But you also need to be doing some of that other stuff that we’ve gotten away from, such as direct mail. Yellow letters used to be fantastic.
Good friends of mine, John and Donald McNeil created that letter years ago, back in ’06, I think it was, or ’05. And millions and millions of letters have been mailed out. And they worked great. They used to get a fantastic response rate of anywhere from 20-45% response rate.
Now, a lot of those response rates were angry sellers, but you’ve got to sift and sort through those and get to the guys that are wanting to actually work with you. And then, everybody started using the yellow letters because that’s what was being taught by all the gurus. So it got over-saturated. Yellow letters quit working. That’s why we went to the FSBO calling.
Now, the FSBO calling is starting to get over-saturated because it’s, number one, free. I mean, you go to Craigslist and Zillow and your newspaper and ride around and find a FSBO sign. It’s a lot cheaper than a yellow letter.
Well, today, I’m going to say to do the FSBO calling, do the yellow letters, do postcards, mail more than once to the same list. If you just mail one time to a list, your success rate’s going to be very low. You’ve got to mail numerous times, preferably four, five, six, seven times. Now, it gets a little expensive. That’s why I throw in the postcards as well because they’re less money than a yellow letter. So direct mail is fantastic.
Another thing that we’re doing today is we went back to bandit signs. Now, bandit signs can be tricky too. You’ve got to watch those because if Code Enforcement doesn’t allow bandit signs, you’ve got to think outside the box. So what I did was I went online and I ordered tons and tons of magnetic signs that looked like the bandit sign.
And then I hand them out to anyone that’ll put them on their vehicles. The lawn care guy, the pool care guy, the plumber, the electrician, anybody and everybody who’ll put them on their car. And then we track, as the leads come in, where they heard about us. And if it was Bob the Plumber and we buy the house, I send Bob a check for $250. So it’s a different way of doing bandit signs that Code Enforcement can’t touch you. So why mess around with Code Enforcement if they’re coming after you? Don’t do it. Do the magnetic signs instead.
So you’ve got FSBO calling, you’ve got direct mail, you’ve got bandit signs. What about posters? What about flyers? All those things? The old techniques still work. And a lot of them work really good today because nobody else is doing them. All they’re hearing about is FSBO calling. So change it up. Change it up. Do different things. There are so many different marketing techniques. You can go online, you can post ads online.
Of course, we do not market properties unless we actually own them. We generically market properties. So we’re looking for people to come in to fund our deals. So I want you to keep that in mind too. We’re not marketing a property specifically unless we own it. Now, if I own it, I’m going to market the heck out of that thing. So keep that in mind too. And why do I say, “Don’t market the property specific?” Because if you don’t own it and you’re marketing it, even if you have an agreement to buy it in today’s real world, that is not going to stand up. And you could be in trouble.
So we generically market properties looking for the buyer instead of selling the actual property itself until they come in. And then we can discuss the properties that we have under agreement. So that’s marketing today. It’s a little different than what it’s been over the years, but you’ve got to change and you’ve got to tweak it and change as the market changes. I’m telling you, some of this online marketing, you’ve got to practically change it almost every week. What worked last week may not work this week. So keep that in mind as you’re marketing.
I tell all my members and all my students, this business is 98% marketing. If you’re not marketing for sellers, buyers and private money, you don’t have a business. So keep that in mind. Most of this business is marketing. So if you can master that, and the number one thing to master is looking for those buyers. If you can build a huge buyers list, he who has the biggest buyers list wins. So keep that in mind.
Go for the buyers. The properties are easy to get. Get the buyers list. Keep building it because a buyers list will only last 30-35 days because they’re looking to do something today. And if they don’t get it from you, they’re going to get it from somebody else. And if they get it from somebody else, they’re no good on your list other than they’re just another number. But you don’t want them on your list. You want just the ones who are actively pursuing buying today.
And there are three things I look for when I’m pre-qualifying my buyer. And that is do they have cash, and how much? Can they get a loan, and how much? Do they have money down? How much and how much a month can they afford for a payment? That’s all I care about. The rest of them are tenants in my world. So keep that in mind. Build your buyers list first, go for the sellers, the private money all the time. Ninety-eight percent of your time should be spent on marketing to drive those three types of people in.
All right, guys. Hey, once, again, John Iannotti here, your host of REI Classroom today. And I look forward to seeing you at the top. Take care. Bye-bye.
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