Don’t Have Any Money For Marketing? Do This.
You don’t have any money for marketing? That’s OK.
There are many other ways to generate leads for your first deal (or deals).
My three favorites are:
- Driving For Dollars
- Online Searching
Let’s break them down.
If you want to do well in this business, you MUST network with your local investors, sellers, realtors, attorneys, accountants, mortgage brokers, property managers, etc. You also need to be, of service.
When networking, the key to success remembering “what’s in it for them,” not you. For example, when I first started, I would call / email bandit signs. The basic script was:
Hi Ms. Investor, I would like to help grow your business. I focus on [your target area] and it appears you do, as well. What kinds of deals are you looking for and how many do you buy per month? Can I send you a deal?
Guaranteed they say “YES!”
In the early stages, don’t even worry about a commission or finder’s fee. Right now, your focus should be on building a brand within your investor community and building your buyer’s list, along the way. Taking $1,000 per deal for your first few deals is a solid win for you and your investors.
Another group of professionals, which worked well for me, was calling on attorneys and accountants. They know, before anyone else, when their clients run into difficult situations. Remember, you are a problem solver.
Here is a script (email / letter / call) to make contact:
Hello Attorney Smith, I am a real estate investor who works with high-net-worth individuals to buy properties in [your target area]. We typically can make a fair market, all cash, as-is offer and can close within 30 days, usually faster if there are no title issues. If you have any clients looking to sell their home or real estate investments, I welcome the opportunity to be of service to you and your clients.
Another place to network is your local Real Estate Investors Association (REIA). Here at CTREIA, the largest real estate investors association in the Northeast, we get 150–250 local investors at each monthly meeting.
Now that COVID appears to be in the rearview mirror, your local REIA is a target-rich environment to meet people who can lead you to your first (or next) deal AND the people who will likely buy that deal from you! Introduce yourself. Get to know people. Collect as many business cards as possible. Specifically, you want their email address and phone #.
Driving for Dollars
Every single time I drive around running errands, with my family, or as I’m running from project to project, I’m on the lookout for broken-down houses and apartment buildings.
When I find one, I use a skip trace firm to identify the owner. When I find them, we call, email, and write letters to get the owner to engage in a conversation.
The objective is to carefully understand the owner’s situation, identify if they might be interested in selling the property, and get a meeting.
Do not make the mistake of trying to talk them into anything. Instead, seek to understand their problem, then work to create a fair offer that solves their problem.
Leave your sales hat at home. Empathy and creative problem solving are your best tools here.
Lastly, don’t have money for a skip trace? Property ownership records are public. Go to the local town hall and gather the owner's information yourself.
Online marketplaces provide a huge trove of information on properties within your target area. For instance:
With Zillow’s database of residential and small multi-family properties, you can search to find all property owners in your target area who are at risk of foreclosure. You want to search for properties in pre-foreclosure. These are the properties that have been served a lis pendens. A lis pendens is a formal written notice that a lawsuit has been filed. In other words, the property owner is behind on their mortgage payments and the bank is beginning the foreclosure process.
A good script I’ve used in the past is:
Hello, we have been buying properties in your area and I am looking for one more. Would you be interested in selling your property at [123 Main St], in [City]? We typically buy properties like yours for all cash, as-is, no matter the condition. We can usually close within 30 days.
Contact the owners 2–4 times a month. Remember, you need to touch a seller 7+ times before they recognize your name, your brand, and the value you bring to their situation (you’re a problem solver). You want them to engage with you.
Every “no” you get only brings you closer to your next deal. Be respectful, be disciplined and be persistent. When they tell you to go away, and most people will…go away.
You can always circle back after a few months if they continue to struggle.
One way I follow up with and revive these folks is to send them a case study of a local deal you did and how you were able to solve that property owner’s problem. Position yourself as a problem solver. Make sure you display your name, logo, and contact information on the communication. Also, be respectful of the seller in your case study.
You don’t need to disclose all the details of their situation. Respect the seller’s confidentiality.
Meet every top-selling realtor in your area. I typically use realtor.com and loopnet.com to find the top sellers. When a property goes under contract, I will reach out to the selling realtor with this script:
Hi Ms. Realtor, I saw the property at [123 Main St] in [City] is under contract. If the deal should fall through, I’m prepared to make an all-cash offer. You can represent me and get both sides of the commission.
Additionally, for the future, we buy [# of deals] per month. Please keep me in mind. If you provide me with your email address, I’ll send you my contact info.
For Sale By Owner(FSBO)
There are dozens of sites that cater to property owners selling their properties without a Realtor or Broker.
In most cases, the seller either has a distrust of Realtors or there isn’t enough equity to pay a commission and get the money they need. Either way, contacting each one is an excellent opportunity to acquire your first (or next) deal.
I use a script similar to the one I use to contact Zillow properties:
Hello, we have been buying properties in your area and I am looking for one more. We are interested in buying your property at [123 Main St], in [City]? We typically buy properties like yours for all cash, as-is, no matter the condition. We can usually close within 30 days.
Set a meeting with the owner to look at the property, understand the seller’s situation, and make your offer.
A final note about making offers. You should make a standing offer on every, single property you see. Every. One.
Worst case, the owner says “no.” Best case, it creates a dialogue that will develop into a deal. I’ve lost count of how many offers I made months ago…sometimes, years ago…came back as interested sellers.
And forget about pressure tactics. They don’t work. All pressure does is alienate your seller from your solution.
Be fair. Be honest. Be patient.
CTREIA is the largest real estate investors & apartment owners association in the Northeast. We provide motivation, networking, funding, insurance, and coaching for investors in Connecticut and throughout the US.
If you are interested in learning more about becoming a CTREIA member or are interested in learning how to become a real estate investor, go to CTREIACoaching.com. If you’re interested in funding your deals, go to CTREIAFunding.com. If you’re interested in protecting your assets, go to CTREIAInsurance.com.