BiggerPockets

I need help deciding how to spend my marketing dollars. I've been sending letters to out of state owners. I'm going to begin marketing to absentee owners (that live in state) and already have half the work done for that.

My question is, I want to balance frequency vs. reach. Right now I have $200 per month for marketing. I can hit one zip code in my area for out of state owners one month, then hit absentee owners the next month based on my budget and the number of leads in the zip. Do I try and stretch out the time between contacts to 120 days so I can work on another zip code, or do I put all my focus on this one zip code and hit them more often?

When you say I may not even get a deal, do you mean I may not even get a deal this month, this year?

My goal is to do 3 deals this year. If I can market to just 500 home owners, and also incorporate some of the other suggestions you have, is that reasonable?

I'm currently sending letters out (handwritten). I realize the expense is much greater this way but I feel like the response is also a lot better as well compared to post cards. What are your thoughts on this?

If your goal is to do 3 deals this year then you can certainly attain your goal.

As, for possibly not getting a deal, I'm just looking at the stats. You should expect to send letters to this group about 3 times before you get a deal. I was implying that if you sent out 500 cards one time that you probably won't get a deal.

Nothing is concrete and you may get 3 deals after your first mailing or you may not get any after 3 but I'm just going by averages that I've seen and experienced.

I've used handwritten letters on small yellow legal pad paper in invitation style envelopes and received more calls then I do from postcards. However, because the message simply said "Hi my name is ____ and I would like to buy your house at ________." I had to talk to a lot of people who just thought that it was peculiar, and they were interested in finding out if I was going to pay them some glorious amount of money for their home. Volume isn't always a good thing!

You may want to weed out the non-motivated sellers by creating a message that addresses things such as, "unwanted property, major repairs, foreclosure, etc...." I would imagine that the handwritten letter in an invitation style envelope will get opened more then other types of mail but I would suggest targeting your message.

Also, you should include owner occupied homes as well.

Adding in other types of advertising will only increase your chances of getting a deal.

As for Bandit Signs, make sure that you use stakes and put them on private property rather then on telephone poles or city property, and out of the "right of way" which I believe is about a 3 ft radius around utilities and public areas.

Good to meet you...

If you only have 200 dollars I certainly would think strongly about doing the following... After writing a book of 101 ways to market as an investor and being a guy who has spent 600k in a single year doing it this method is by far the best if you have limited resources.

BTW sorry its a long reply...

Center of Influence
Talking to People You Know is an exceptional method for creating busi-ness. Much like building your referral program, marketing to your cen¬ter of influence is widely underutilized. This group of people is probably the least tapped into referral base you have. After all, we don't want to bother people we know with our business, do we? To that I say, "Bull!"

There are no better fans than those people who know your character, your trustworthiness and your commitment to helping others. However, most investors have a difficult time contacting these people and solicit¬ing their help. I believe you should create a list of everyone in your life you know. And when I say, "know," I am only referring to those people you can call on the telephone or send an e-mail to. I am not talking about the acquaintances we have in our lives, like the postal worker or the teacher of our children. The people you want to contact are in what's called your "Center of Influence."

Here is an example of a partial list of your Center of Influence.
Mary Smith 1324 South Emery Street 661-555-4854 Sister
Mark Smith 1324 South Emery Street 661-555-4854 Brother
Fred Williams 514 Bruce Street 661-555-7878 Attorney
Melba Jones 1001 A Street 661-555-0114 Friend

Again, your list should include everyone you can call or e-mail. No mat¬ter what your relationship is to the person, if they will know you by name, then put them on your list of people you know. One note: only put people on your list who live in the city in which you plan to buy houses. Asking Grandma, who happens to live two states away, to refer you to her friends will not be the highest and best use of this marketing program. With that said, everyone else will be.

The following are examples of types of people who could be in your Center of Influence.
mother and mother-in-law
father and father-in-law
brothers
sisters
former and current brothers-in-law
former and current sisters-in-law
past and present CPA
past and present attorney
past and present real estate agent
landlord
hair dresser
manicurist
massage therapist
workout trainer
tailor
pool service rep
gardener
doctor
all members of a charity organization you might belong to
church members you know
anyone you have donated money to-ever
co-workers
former co-workers
former employers
current employer
current customers of your current job (be sure to first get approval from your supervisor)
former customers
drinking/social buddies
college friends
high school friends

You can see that the list can go on and on. I will caution you not to prejudge anyone that comes to mind as being someone who will not be receptive to your new endeavor. Everyone changes, and if four years ago you didn't have the best of relationship with them, so what. Don't let that stop you from including them.

Once you have established a list of people who know you, you do two things to the people on your list. One, you will mail them a letter with 10 business cards and secondly, you will tele-phone them and tell them about your new career.

Here is a sample of the type of letter you should send:
Hello,
I am excited to announce the establishment of my new business, [Your Business Name] here in [Your City]. After careful consideration and extensive study, I've found the one thing that I enjoy and can make a difference with - Real Estate Investing. The opportunity to help people who may need to sell their houses is a worthy endeavor and the rewards are endless.

I understand that jump-starting my career is of great importance and I am counting on you for your support.

One of the first rules of business is that referred customers are the key to suc-cess, as these people are much more likely to do business than those who don't know anything about me. I put together a list of people who I felt I could count on to help me succeed, and I had no doubt that you would want to be included in this process. And, it doesn't come without reward to you. Although I know that you would not want something in return for helping me, I'm excited to be able to offer you $500 for every referral whose house I buy. This is for your time in telling others about what I do.

So if you would, when you hear of someone who is looking to sell their house, just give them one of my business cards and at the same time, gather their tele¬phone number and name, and then call me with that information. I am hoping that won't be too much trouble. I would certainly appreciate it. To make this all the easier, I have already written your name on the back of each card.

My business will cater to people who need to sell for a number of reasons.
Trying to buy a new house and need to sell
Divorce
Foreclosure
Probate issues
Job Transfers
Tired of being a landlord
Bankruptcy
Any other reason someone may have
Thank you for your help, and I appreciate your friendship and support.
Respectfully,
[Your Name}
[Business Name]
[Telephone Number]

You will mail this letter immediately upon the completion of your list, and include 10 business cards with the recipient's name on the back. Take the time to respect their time by writing their name on the cards. They will appreciate it, and when you ask a seller who referred you, he/she be able to tell you and you'll be able to reward your referrer.

Again, the second thing you will do is call the names on your list by telephone and let them know of your new endeavor.

The following is a simple conversational script to use as a guide:
Hi [name] this is [your name]! [You may have to remind them who you are by refer-encing someone or something. Once you know that they know who you are, continue as follows:]
Question: I hope all is well with you and your family.
Answer: They're doing great….
Statement: They're doing great… Outstanding!
[Always repeat what they say with a positive or negative follow-up word.]
Statement: I don't want to take too much of your time, but I wanted to tell you about a new endeavor I've started. I have researched and been studying the real es¬tate market and have started investing in single-family houses.
Statement: My company's name is called [your company] and I'm going to be work¬ing with people who need to sell their home for a variety of reasons: divorce, foreclo¬sure, probate, job transfers, people tired of being a landlord... basically anyone needing to sell a house.
Statement: I was hoping to count on you for a reference if you happen to come across anyone needing to sell.
Statement: I've sent you a few of my business cards and a letter to [their address] outlining what I'm doing. If you would read it over when you get it, that would be great. And if you have any questions please give me a call back.
From there, just have a normal conversation with them. Be prepared for them to ask you about the market.

Note: Any of their negative feedback response will be great practice for when you come face-to-face with sellers, so use every opportunity that presents itself to you. In other words, turn lemons into lemonade!

I recommend that you call these people monthly and ask them for referrals. Sending a letter once or making one telephone call will not reinforce your new career. So take the time and energy, and call. Besides, these are people in your Sphere of Influence and most likely would like to hear from you.

The second type of person will be your acquaintances, those people that you come in contact with on a daily or weekly basis but don't really socialize with or know that well.
The following is a list of that type of person.

bank teller
grocer
child's school teacher
pest control technician
air conditioning tech
auto mechanic
person in your office complex
receptionist at your gym
postal carrier
gardener
parking attendant
computer tech
Talking to Acquaintances

Your acquaintances will not be as enthusiastic about referring people to you as your group of people who you know well. You have to strike up, at least, a light-hearted relationship with them. I am not saying you have to become good buddies, but it is important that there is a sense of respect and reciprocity. A few kind gestures or words will go a long way. A cold soda given to your gardener on a hot day will bring big rewards.
When approaching these acquaintances, remember that their sense of loyalty and commit¬ment to you is less than those in your Sphere of Influence. I have found the easiest way to broach the conversation of referrals is to start taking about their family.
The conversation should go something like this:
Question: I hope all is well with you and your family.
Answer: They're doing great….
Statement: They're doing great… Outstanding…
[Note: Always repeat what they say with a positive follow-up word (or a negative one if appropriate, like if someone has a cold or something.]
Statement: I don't want to take too much of your time, but I wanted to tell you about a real estate program I have that could make you some extra money.
Statement: I've started investing in single-family houses, and I'm offering to anyone I know who refers me to a home seller that I end up buying from, a $500 referral fee.
Statement: I work with people who need to sell their houses for a verity of reasons: divorce, foreclosure, probate, job transfers, people tired of being a landlord, anyone needing to sell a house.
Statement: And I was hoping to count on you for a reference if you happen to come across anyone needing to sell.
Statement: Here are a few of my business cards. If you would pass them out to any-one you know who may need to sell their home, that would be great. Just write your name and number on the backs of the cards so I can make sure you get your $500 referral fee.

The script is different from the Center of Influence in that these people don't necessarily know you very well, and you don't have to tell them that this is a new venture for you like you will with people that know what you have been doing. Coming from a position of knowl¬edge is more powerful than coming from that of a learning stage, so choose your wording wisely.

Also, reiterate to these people monthly what you do and your offer of the $500 referral fee.
Now we're to the type of person that you don't know.

You Never Know Who You're Talking To
Never assume that someone is not worth promoting yourself and your services to. Even if a person doesn't own a house or isn't considering selling, they may very well know someone who is, or they may want to sell some day down the road, themselves.

Strike Up a Conversation
Most people are terrified to talk sales with others, especially people we don't know. This is mostly because they know that they are going to have to ask people to part with their hard-earned money, their most valuable possession of survival. I'm not going to get into whether you should or shouldn't try to hard-sell people in this e-book, only that there's an easy-to-confront way of promoting yourself without having to ask others to give you anything. In fact, as I mention above, you actually give them something (the Birddog Fee).

Small talk is the easiest form of communication there is. It's light, it finds itself in much agreement with both parties and is rather enjoyable. And through the right small talk, you can open doors to recruiting more allies.

If you're at the health club, for instance, riding a bike; make eye contact with your neighbor¬ing health enthusiast. Just find a point of commonality and blurt it out. There are so many ways to do this: you can start with a joke, a question or a comment that you think they might agree with:
JOKE: "And we do this why?"
QUESTION: "How far do you ride?"
COMMENT: "I can't believe how out of shape I am!" or (if it's busy at the club) "It's so hard to get a bike at this time of the day." Or (if it's slow) "It's so much nicer here at this time. You can get a bike no problem."
These are all very real and inviting comments that allow others to start talking to you. The trick is to look for a point of commonality and go with it.
If you're standing in a long line somewhere and it's taking forever to get through, look at the person behind you and say, "I always seem to choose the slowest line," or if you have a full basket, say "I only came in for one item." These kinds of icebreakers are magical in getting others to be willing to talk to you. (They might even instantly come to like you!) And once they respond, the door has been opened for you to easily give them your business cards. They will willingly take them, and they will willingly hand them out.
If people acquire a good feeling about you, they are likely to feel good about recommending you to their friends and acquaintances. It takes but a comment or two to impress upon an¬other that you're a nice person. Once you've done that, hand your cards and tell them of your commission program. It's that simple.
I challenge you to hand out 10 sets of three business cards every day, Monday through Fri¬day, to people you come in contact with. I know, you'd rather not talk to 10 people you don't know. What's worse, they don't know you either. It can be a bit difficult to accomplish. How¬ever, real estate investing is an extremely profitable venture, and those profits don't knock your door down on their own; they must be earned. Just think of your business cards as seeds that must be planted in order to reap the harvest.
Here is a list of what this type of person looks like. I know it's a short list, but it's extensive in its scope:
All females you see
All males you see
It is that simple! Learn to strike up a conversation with strangers and you will be rewarded handsomely. Perfecting this trait will also give you incredible confidence when communicating with sellers and negotiating reduced house prices.

One more suggestion: when you send someone a referral fee check, always include five or six more business cards.

Happy house hunting....

Michael