Chapter 7: Real Estate Marketing
"Marketing takes a day to learn. Unfortunately it takes a lifetime to master." - Philip Kotler
No matter what aspect of real estate investing you choose to engage in, you will probably need to use marketing in some fashion. Marketing is the process of reaching outside your normal sphere of influence to propel your business forward. Where you take your business is entirely dependent on you and your marketing skills.
In this chapter you'll learn:
- Your Greatest Marketing Tool: Yourself
- Marketing Through Networking
- Networking in the Online World
- Your Marketing Funnel
- Marketing Through Direct Mail
Your Greatest Real Estate Marketing Tool: Yourself
As a real estate investor - the first and most important thing you'll be marketing is yourself - your own personal brand. It doesn't take a lot of money, and it doesn't take a lot of time. You will begin building a brand around yourself the moment that you begin talking to others about real estate. You never know where these conversations are going to lead you - so guard your brand fiercely. Let's look a little deeper at how to effectively market your own personal brand.
As a new investor - you are not going to know everything and that's 100% okay. One of the quickest ways to tarnish your reputation is when you start speaking about things that you don't actually know much about. When you try to come off as an "expert" and you're not one, other real investors will know immediately and will not waste any time dealing with you. Admit what you don't know and use that to learn. In fact, one of the best ways to grow as an entrepreneur is to ask a lot of questions and, in humility, listen to those who are willing to teach.
Also - don't mis-represent yourself. We often see new investors do this here on BiggerPockets and elsewhere online. What you'll sometimes see, is a new investor coming on the scene and introducing themselves as such. Then, in just a few days (sometimes less) they talk about having "properties in all 50 states" that they are willing to sell on discount. Unless that person suddenly inherited dozens of properties overnight - that person is likely mis-representing themselves. In most cases, that person is merely a wholesaler following the advice of a guru somewhere and trying to build a buyers list for their future deals. Yes, building a buyers list is incredibly important. Doing so under false-pretenses, however, is the surest way to never make a deal.
You'll also find new investors marketing deals via Craigslist or other sites, but these are deals that they have no interest in. Like in the previous example, these people are lying about deals to get other investors who might be interested in them. If you get busted lying about a deal, you can rest assured that you'll never do business with those folks who discover it.
Do you do what you say you will do? Your integrity is the thing that will keep people coming back to work with you, time and time again. As an investor, your reputation will precede you wherever you go. This means that you need to continually be sure you are acting with the highest level of integrity. Imagine a lender who promises to lend but then backs out at the last second - would they continue to grow their business? How about a real estate agent who undercuts his clients and swoops in on all the good deals under his client's feet - would he continue to grow his brand? Your integrity is an integral part of your brand - and can easily be tarnished. Maintain the highest standards of integrity and the business will find you.
Are you planning on running a hobby or a business? If you want to be seen as a business professional, you can start right now. Every decision you make, every relationship you build, and every item you buy: be professional. You don't need to be a million dollar business to look like one. Showing up to a house with a dirty hawaiian shirt and shorts probably isn't going to give you the professional image you want to succeed. The same goes for the business cards you order, the voicemail on your phone, and the appearance of your vehicle. People trust professionals - so start acting like one.
Real Estate Marketing Through Networking
One of the most important marketing tactics you can start implementing today is by networking. Networking is simply the process of getting to know others for the purpose of moving both individuals forward. It doesn't need to a formal thing - but your day-to-day interactions should be part of your networking strategy. Networking is often thought of as happening at an event, where dozens of people get together and mingle, exchange cards and tell industry specific stories. While yes, this is a form of networking (most often seen at industry specific conferences and meetings) networking is actually a lifestyle.
Some of the most noteworthy connections you'll make will come from impromptu conversations about your real estate investing. I'm not suggesting that you simply walk up to strangers and start telling them about your dreams and goals - but take advantage of talking about your business when the opportunity presents itself. You'll be surprised at how many people are interested in real estate and how often one quick mention of real estate leads to an entire conversation.
Not only is networking valuable for meeting people and businesses that can move your business forward - it's also effective for building your real estate team (which we covered extensively in chapter four). No person can succeed entirely on their own - so finding the best people to work with is one of the important tasks you can do at the start.
Speaking of important, one of the most important places you can start networking at is your local real estate investing club. Located in nearly every major city, people gather at these clubs on a regular basis to discuss current market trends and investing strategies, to swap tenant horror stories, and to make connections. Many of the most important people on your team will probably come from your local investment club. Real estate investment clubs can differ dramatically in size and quality - so if there are multiple clubs in your city - be sure to check them all out. For a list of local real estate investment clubs, see the BiggerPockets Real Estate Clubs page.
Do keep in mind that many of these clubs are also designed to be profit centers for their owners. So, you may need to endure sales pitches from gurus and other salespeople. That said, there is nothing more important than connecting with your local peers, and these clubs area a great place to find them.
There are other networking events that are great for meeting your peers, including landlord association meetings, meetups, and small live events organized by your peers here on BiggerPockets.
A final note on networking: get yourself some professional business cards. While many aspects of "old time" marketing are fading away - the business card remains a staple in the real estate industry. Be sure that your business card contains the following information:
- Your Name
- Your Company Name
- Your Company Position Title
- Your Website
- Your Phone Number
- Your Email Address
- Your Wants/Needs if Applicable (We Buy Houses)
Networking in the Online World
The world is changing more digital each day - and to be a top performer in the real estate investing industry you are going to need to change also. Let's look at a few areas you can begin networking online:
- BiggerPockets.com- BiggerPockets is an online community of real estate professionals that network with one another every day, all day, to help each other learn, grow, and prosper. Begin your networking here. It is important to note that when networking with others, it is not about "what can I get out of it" but rather "how can I contribute to the conversation."
Hang out on our forums, asking questions when needed, and answering others when you can. Comment on blog posts, send colleague requests, follow popular users, and engage whenever possible. Networking on BiggerPockets is the same as networking in the real world - it's not a one-time thing. Seek to become a familiar (and friendly) face on the site. This means to be sure you have a picture uploaded to your profile - and that your profile is fully filled out. Would you want to network with someone who had no face to identify with and you had no idea what their story was? Never. Relationships are built with trust, and trust is built through transparency. For more info on getting involved, and for links to helpful tutorials, check out our Start Here page.
- Your Website - Having a website is a sign of professionalism in the industry - a sort of "store front" to your business. That storefront needs to look inviting, professional, and clean in order to attract people. In today's tech-friendly world - a great website is not hard or expensive to build, even if you are terrible at technology.
- Social Media - Facebook, Twitter, LinkedIn, Google+, and dozens of other social networks are out there and are ripe for networking. You don't need to have a presence on every single network, but focusing on one or two is better than being non-existent on all of them. The trick to networking via social media, however, is to not use it as an advertising platform. Social media is about creating relationships, so spend your time building solid relationships and make a name for yourself as someone with knowledge.
- Blogging - A blog is simply an online collection of articles, ordered from newest to oldest. A blog can help you establish credibility in your investing field but can also be a great tool for sorting out your thoughts on paper (well, on the screen) and hashing out ideas. Furthermore, blogging can be a fun way to give back to the community. If you are interested in hosting your own real estate blog, you can sign up for a free blog right on BiggerPockets.
Your Marketing Funnel
Marketing funnels are designed to transition a person from having no knowledge about your company to the point where they are ready to engage in a business relationship with you. People use marketing funnels in nearly every form of business, and real estate investing is no different.
You are probably familiar with a "funnel" - often used for pouring large amounts of liquid into a small space, such as putting oil in a vehicle. At the top - the funnel is at it's widest, collecting the most amount of whatever substance you are capturing. As the substance moves down the funnel, it gets smaller and smaller until it comes out the bottom into whatever container you are pouring it into. In the same way - your marketing funnel will seek to bring in the most amount of people at the top, and through progressive steps your funnel will get more specific until you have a much smaller number of people left to produce your desired goal.
The kind of marketing funnel you set will depend greatly on the kind of investing you get into. A marketing funnel for a wholesaler is going to be significantly different than that of a note buyer - but perhaps with similar themes. For example - a wholesalers funnel may look a lot like this:
- Send out postcards to individuals who are past due on their mortgage.
- Set up a 1-800 voicemail number for people to call for foreclosure help.
- Allow people to leave a voicemail if they want more information about selling their property.
- Call individuals who left a message and screen for possible good leads
- Meet with the good leads and make offers
- Get offers accepted and sign a purchase and sale agreement.
- Do due diligence
- Close on the property.
Notice that in each step, the funnel narrows. At the start, perhaps five thousand people receive mailers. Out of them, perhaps only a hundred people make the phone call to the number on your postcards. Out of that hundred, only twenty leave a voicemail, of which only four warrant a personal visit and an offer. Finally, perhaps one or two of those offers may actually result in a signed deal for the wholesaler.
While it may seem like a drastic waste - that one or two deals may result in a huge financial windfall for the wholesaler. This is merely one example of a functional marketing funnel. As mentioned above - your marketing funnel may differ quite a bit from the above funnel.
As a real estate investor, you need to be constantly measuring and tweaking your marketing funnel. You can and should test your funnel to continually increase conversions -- the percentage of people who make it all the way through the funnel to your desired outcome.
For example, (to draw from the wholesale funnel example above) you could get two separate phone numbers, split the group of past-due homeowners in half, sending half the postcards to one group and half to the other - and measure the results. Do you get more calls from postcard A or B? If postcard A received twice as many calls - then use that as your "baseline" and test again with another postcard C. As you can see, your marketing funnel can continually be tweaked, tested, and measured to make it run like a well-oiled machine.
Marketing Through Direct Mail
What is Direct Mail? While we are on the topic of postcards and mailing letters, let's discuss that in more depth. This form of marketing is known as "direct mail." Direct mail is simply the process of sending letters to targeted individuals through the mail, in hopes that a small percentage will respond to those letters. Whether you are a wholesaler, flipper, or buy-and-hold investor - your business is dependent upon finding great deals and having a consistent supply of leads for those deals. Direct mail can be a great tool for building a steady supply of leads for your business, and can be a great way to keep your funnel full. For many investors - it is their number one source of leads.
How does Direct Mail Work? Direct mail campaigns are designed to build awareness of your product or service over time. Think back to one of the last purchases you made, such as a drink at Starbucks, a movie you rented, or a song you purchased from iTunes. Chances are, you didn't buy that item the first time you heard about it. Most folks simply don’t buy from a business the first time they come across it. Therefore, a direct mail campaign can not be a simple "one and done" campaign. By sending messages over the course of time, the recipients become familiar with you and your service or product, and some will respond as you become the solution to their needs.
How do I Build a List to Send to? You can build your list by using public records provided by your local county assesor, or you can hire an online company like Listsource to get your list for you. While using the pubic records is free, using an online company may save you time - so keep your goals in mind as you begin creating your list. Do note that you need to have your list re-done every six months or so to keep it fresh, as the market is continually changing. You will need to get rid of those folks that are no longer candidates for your particular list, and you will want to add in new people.
What do I Send? There are two primary options that investors tend to mail to potential leads. Let's look at these briefly:
- Postcards - these can be either large or small, but the benefit is that the recipient doesn't need to physically open an envelope to read what's inside.
- Yellow Letters - Written (or typed) on an actual yellow piece of paper, these letters are typically mailed in an envelope. The response rate is often very high, due to the "personal" nature of the lettter.
Who Should I Send Direct Mail To?
Both the frequency with which you mail and the length of the campaign will vary depending on the type of marketing funnel you are setting up and the type of investing you are engaging in. Direct mail can be sent to virtually anyone, so you'll need to look at your funnel and decide. The following is a list of a few different types of people you may want to target:
- Absentee owners. For those looking to get a great deal, those folks who are absentee owners are great targets, particularly those who live out of town. In many cases these owners may have moved for work or another reason and may be looking to get rid of their property.
- Abandoned Properties. People may abandon a property for a variety of reasons - but in most cases, they don't care enough about the property to want to keep and spend the money required to keep it up. Contacting owners of properties that look to be dilapidated or abandoned may lead to fantastic opportunities.
- Probates. Probates are properties that are in the process of being distributed, along with the assets of a deceased person, to their heirs. When investors talk about probate investing, they are trying to find if a deceased person had property, then tries to get the heirs/executor to sell that property to them at a discount.
- Pre-foreclosures and Foreclosures. People struggling with losing their home are often times highly motivated to sell (though, sometimes, they are highly anti-motivated and choose to just stick their heads in the sand.) You can often times find a way to create a "win win" situation to help these individuals save their credit and snag a great deal for yourself.
- Apartment Owners. If you are looking to get into apartment buying, mailing to apartment owners can be a great way to stay on their radar. Your mailings do not need to be necessarily targeted toward distressed or motivated sellers, but can be geared toward individuals who are willing to finance the property themselves using seller financing.
- Expired Listings. Your real estate agent will have access to all the properties on the MLS that did not sell when listed with an agent. These individuals may be more willing to sell at a discount after their property was listed for some time and didn't sell. Additionally expired may also be motivated now that they no longer need to pay any real estate agent fees.
Whatever niches you choose to work in, be sure to keep organized records of your campaigns, so you can measure and test your results, maximizing your efforts.
Marketing Through Online Advertising
As more and more people spend their time online, you may be left behind if you don't move your real estate marketing into that arena as well. The internet provides numerous ways you can market your real estate investing business, and - as with all marketing techniques - the style of marketing you do depends greatly on the type of investing you engage in. The following are several tools you can use to market on the internet.
Facebook/Google Ads for Real Estate
Do you ever wonder how Facebook or Google make all their money? The majority of their revenue comes from their online advertising platforms. As an investor - you can use these sources to target potential sellers, buyers, or other business interactions. While Facebook and Google ads may look fairly similar, they differ in several key ways:
- Facebook allows you to target who sees your ad based on their interests, location, demographics, and connections on Facebook.
- Google allows you to target who sees your ad based on their searches, web history, and location.
The benefit of these kind of online ads are that you can set it up so you only pay when the ad works.
Imagine asking a local newspaper to only charge you when someone calls about your ad. There's no chance of that happening. However, this is exactly what this kind of online advertising allows you to do. This is known as “pay-per-click” advertising, which means you only pay when someone clicks on an ad and goes to your site. With pay-per-click advertising (such as ads on Facebook, Google, or Bing), you only have to pay for the ad when your advertisement accomplished it's goal of placing people in your marketing funnel.
Benefits of Online Pay-Per-Click Advertising
- Most online pay-per-click advertisements allow you to be location specific – which means you can choose to have your advertisement seen only by individuals within ten, a hundred, or any number of miles of your specified location.
- Additionally, Facebook ads are interest specific. (Do you really believe Facebook’s “like” feature is only for the user's benefit?) Facebook uses those “likes” and friendship relationships to help marketers reach certain people. This means, as a real estate marketer, you can choose to show your ad only to people who are interested in a certain topic.
- Finally, most pay-per-click advertising (especially Facebook) is demographically specific so you can advertise to specific ages or genders. For example, you can create a well written advertisement to attract first time homebuyers by choosing to advertise only to people between the ages of twenty-two and thirty-two that live within ten miles of a property you are attempting to sell.
How Online Ad Pricing Works:
“How much does it cost?” is a more difficult question that it may seem.
Pay-per-click marketing prices are based on an “auction,” meaning that advertisers “bid” on a price to display their ad. Marketers then compete for either keywords or interests, based on the criteria you are targeting your advertising to. When you set up a new ad, you will tell Facebook, Google or Bing what price per click you want to pay, and you'll generally never be charge you more than that. If you bid too low - your ad will not be shown due to other marketers paying more. Thankfully, the major pay-per-click companies do provide a general range of prices, so you can determine how much you'll need to spend to reach a specific demographic. You also have the option to set a daily or monthly budget - so you can control how much you want to spend on your marketing.
Tips for Creating Online Ads:
- Where Will Your Ad Send People? This destination could be your own website, your business Facebook page, or any site that you want. Just be sure this destination is part of your marketing “funnel.".
- Create a Title that Pops. You are allowed only a limited number of characters for your title – so make them stand out. It is helpful when advertising to local potentials to use something local in the title to make the ad stand out. Online viewers are not generally accustomed to seeing local names and places on an online ad - so ads like that tend to pop.
- Intrigue them with your ad's body. The part of the ad that is not the title is known as the "body." Appealing to both fact and emotion when you write the copy for your ad's body can help triggering interest in both sides of the brain and increase clicks. Promote benefits over features.
- Use an Eye-Catching Photo. If using Facebook - the photograph is the most important section of your ad because it is generally the only thing viewers pay much attention to at first. Catch their eye with the photo, which leads them to the title, which leads to the body, which leads to clicks. An advertisement, in itself, is a funnel as well.
- Determine Your Price. To avoid massive spending, be sure to set your budget. Decide what your monthly or daily budget is and bid on your ad price. Monitor the results and adjust your bid price higher if you are not spending your complete budget.
- Split-test. Split testing is the process of creating multiple ads, each with minor changes, to determine the best response rate from someone looking at the ad. This is the same process we mentioned earlier when talking about sending different direct mail postcards to different groups.
Creating a Website or Landing Page
A website is not a necessity in order to capture leads, but can be highly beneficial. Some investors simply use a telephone number to collect leads, but having a website provides another avenue to collect those potential opportunities. If you don’t have the technical know-how to create a professional looking website, use a pre-made template from a site like Wix.com or simply hire a freelancer at a site such like Odesk.com, eLance.com, or 99Designs.com to build the site for you. You can also create a Facebook business page that accomplishes your goal, but having your marketing funnel on your own website does give you more control.
For more information on Marketing and creating a marketing funnel, see Using Facebook Advertising to Supercharge Your Real Estate Marketing
Also be sure to check out:
- BP Podcast 012 : Wholesaling and Marketing with Sharon Vornholt
- BP Podcast 018 : Flipping, Marketing, and Wholesaling with Danny Johnson
- BP Podcast 021 – Marketing Like a Pro with Wholesaler, Jerry Puckett
- BP Podcast 022 – Building a Marketing Machine, Spec Houses, Flipping & Wholesaling with Tucker Merrihew
- BP Podcast 027: Fix and Flipping, Wholesaling, Marketing, and More with Jason and Katherine Grote
- BP Podcast 046: Six Figure Profit Spec Building and Marketing for Incredible Deals with Jon Klaus
- BP Podcast 018 : Flipping, Marketing, and Wholesaling with Danny Johnson
As you can see, real estate marketing is not a simple process. Each of the categories mentioned above could be expanded upon greatly and an entire book could be written about each. We also did not cover every option available, but those that we feel to be the most commonly used today. The important thing when just beginning is to focus on one or two marketing strategies, and to implement them carefully, while monitoring the results. Once you find something that works, stick with it, and if you want to generate more leads, expand it or move on to another marketing strategy. In the same way - not all marketing strategies are going to produce effective results. This is why maintaining accurate records and continually testing your marketing campaigns is key.
Up until this point, we have looked at how to choose your investment strategy and niche, how to plan for your next investment, how to finance your property, and how to use marketing to make it all happen. In the next chapter, we are going to look at the way you actually begin making serious money from your investments: executing your exit strategy.
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