How to Find More Deals Than you can Handle

There is a serious need for investors to be able to find great deals right now. It is not uncommon to make 30 or more offers to find one deal AND it is not uncommon to be competing with 30 other offers on each deal you look at.

Can I let you all in on a little secret? There is a higher demand for good deals than there is supply and it is getting really hard to find great deals. If you are trying to buy houses from the MLS, and most of you are, then be prepared for a painful and stressful journey to your next deal. If you want to be looking at deals that no one else knows about, keep reading.

When I started investing I learned to buy properties directly from the owner of the house. They would call me and ask me to buy their home. I then could meet with them directly and work out a deal. Negotiating is so much easier when you are actually communicating with someone that can make a decision.

The first thing you must understand about finding great deals that no one else knows about is it is all about marketing. Real estate investing has not really seemed like a business the last few years. There were so many great deals in the MLS that you did not need to worry about marketing, but all that is changing. You need to focus on marketing to drive in leads for your review. It would take me about 10 leads to buy one property and it cost me about $100 per lead. Sounds expensive but when you look at the numbers, you are paying $1,000 to buy one house. Each house should net you $20,000 to $30,000 or more. It is a great idea to keep track of your numbers. You want to know what is working, what is not and how much it costs to get a lead and a deal.

When you begin to create your marketing campaign it is essential to have a budget. How much will you be spending each month, week, etc. There are several things you can do for little or no money but to build your marketing plan please have a budget. Once you have that down you need look at your three Ms:

• 1.Market
• 2.Message
• 3.Medium

Market – Who will be receiving your message? You are a real estate doctor here to solve problems so you need to find the problems. Your message and the medium can suck and you will still get good results if you are speaking to the right people. It is essential that you have a good target market and the smaller the target the better. I hear people tell me that they want to buy in a certain neighborhood so they send out a mailing to everyone in the area. That is crazy!! People with absolutely no motivation to sell their home will be getting your message? Why would you pay for that? Some problems that you may want to look for include:

• Pre-foreclosure (even before the NED is filed)
• Divorce
• Tired Landlord
• Job or school transfer
• Out of town owner
• Probate
• Bankruptcy

These are all signs of problems that need to be solved. You are not only looking for a problem but you want to focus on a problem that has a limited amount of time to fix. In most cases it will be financial pressure.

Message – What are you going to tell these people? If you are focusing on foreclosures or people behind on payments your message might be “Stop Foreclosure” if you are focusing on tired landlords maybe you are saying “we buy property in any condition” If you are buying from someone that just had a job transfer maybe the message is “we take over payments”

The message needs to tie into the market that will be receiving it as well as the type of deal you are looking for. If you want a steep discount but can pay all cash then you should say that. When I was looking for terms deals, meaning I wanted the owner to carry the loan or do a lease option, I would put things like “no equity, no problem” “we pay up to 95% of the value” or similar messages. This is going to sound crazy, but the calls I received were from people with no or little equity. BUT in most cases they were current on their loan and because they could not afford a realtor they were open to other options.

Medium – How will you get the message to the market? What kind of ads will you use? This is where your budget comes in. Here are some ideas that I have personally used in the order I like them:

• 1.Networking
• 2.Direct mail
• 3.Bandit signs (the ugly we buy home signs you see around town)
• 4.Direct phone calls
• 5.Other signs (Yard signs in vacant homes that you have, car magnets, flyers in grocery stores, etc.)
• 6.Door knocking
• 7.Door hangers
• 8.Print ads (news paper ads and classifieds)
• 9.Radio

Networking is the best but takes the longest to actually see results. I think it was more than a year before I got my first referral. The reason I think it is the best is they are slam dunk deals. You will probably not get shopped and deals will just start to come without you expecting or working for them. Be sure to have nice business cards and hand them out to people. Let everyone know what you do and what you are looking for. Be sure to ask them what you can do to help them or ask them what they are looking for. You will stand out if you do.

I love direct mail because you can really pin point a target market and you can send any kind of message you want. You can make it real short on a post card or a long report. The key here is your list but good copy writing can make a huge difference. The harder the list is to get the better your results will be. For example, if it is a list that you can buy from a list broker or get from a title company chances are others are also mailing to that same list. If it is a list you need to build you may be the only one mailing to it. Examples of this are probate or for rent by owner. You can buy out of town owner lists from the county on a CD, there are not many people that I know of that mail to this list.

I have purchased a lot of properties from bandit signs and they are a great bang for the buck. The problem is someone needs to put them up (which sucks) and you will most likely get calls from city officials. I used to pay college kids a dollar a sign to put them up for me and I did get a ton of calls. The leads are not nearly as good as you will get with direct mail so it will take more calls to get one deal. These signs are hands down the best way to find pre-foreclosures that no one else knows about.

Direct phone calls are absolutely the best way to start. It is free and gives you valuable experience talking directly with sellers. The last thing you want to do is spend money generating leads and not knowing how to handle them. It is a good idea to practice on free leads. Stay consistent with your calls. Make a certain number of calls every day.

The others on my list with the exception of door knocking do not work that great. Radio and print ads don’t pull well and are expensive so don’t waste your time or money with those. Other signs work and are cheap but don’t expect great results. I would only do them if you need more leads and have more time than money. Door hangers or flyers are also usually a waste but can work. If you do them be sure you DO NOT put your flyer in a package with other flyers. You just won’t get calls. Have your flyer the only one delivered. It is worth the extra money. You can pay Boy Scouts or other non-profit organizations about $.05 a flyer.

Door knocks just flat work but is low on my list because I don’t like to do them. This is especially affective with the NED list. This foreclosure list a popular list to market to so there is a lot of competition but there are not many door knockers so you will stand out. If you mail to this list you will end up on a stack of junk mail with other investors.

When you start your marketing plan start with the type of deal you want and then pick a target market first. From there it should be easier to come up with a message and a medium but I would find a way to include networking and direct mail into any plan you do. Happy hunting!!