7 Tips for Starting Your Real Estate Business Off On the Right Foot

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I got a question this week from someone that is trying to get started in real estate investing. This woman has decided to start with absentee owners and her question to me was:

I have managed to get the names of a few absentee owners. Now, what do I mail to them?

In her mind, once she had the answer to that question she would be all set. But, as you know, there is so much more to this process. The mail piece is only one, small part of the puzzle.There are a few systems and procedures you need to get in place before you even start your business.

Here Are Some Tips for Starting off on the Right Foot in Your Real Estate Investing Business:

1. You Need a Game Plan

In order to succeed in this business, you need a steady stream of leads; there is no denying that. And there are a lot of ways to generate those leads. One of the first things you need to decide is which marketing strategies will you use. Your budget for marketing is likely going to play a part in this decision. If your budget is so small that you can only start with a few names, your success will be very slow to come.

2. Decide on the Marketing Strategies You Will Start With

I love direct mail. This is hands down my best source of leads, but if you are short on cash this is not the strategy you want to start with. Bandit signs, networking, cold calling or even door knocking are free or low cost. The important thing is to just decide and begin.

3. You Need a Good List

If you plan to do direct mail campaigns, you will need a good list. One thing in her question really bothered me and that was when she said, “I have managed to get the names of a few absentee owners”. Any success with direct mail is going to come about with a good, substantial list; not a few names. This is a numbers game, and it doesn’t work if your numbers are too low. I don’t know yet how many names she has or where she got those names.

4. Where Do I Keep All that Information?

Before you ever send out that first direct mail letter or postcard, you need some basic systems and procedures in place.

Ask yourself this; once you get your list where will you store these names? Where will you keep notes about motivated sellers when they call? How will you manage the implementation of your marketing plan?

You can upload a spreadsheet to a mailing company if you plan to outsource your mailings, but this doesn’t mean that you don’t need a database. You need some type of contact management software. Over time you will have a lot of information.

5. What Will I Say to the Folks that Call?

What to say to motivated sellers is one of the most asked questions that I get. I recommend that everyone start with a property information sheet to use as a guide on those first calls. It helps you to get all of the information that you need. But only use the sheet as a guide; don’t use it as a script. Your calls with sellers should always be conversational.

The second thing you can do is to role play. Practice what you will say when someone calls. Be sure to answer all of your calls when you are just starting out so that you get comfortable talking to sellers early on. It just takes practice.

6. Create Follow up Systems

You have no doubt heard the saying, “The money is in the follow-up”. This is so true.

If you are just getting ready to send out your first mailing, you probably haven’t given any thought to follow up systems. But the truth of the matter is that the right time to figure this out is actually before you send out your first mailing.

7. Planning + Execution = Success

My advice to anyone just starting out is to take the time to plan and create these basic systems and procedures. By having just a few simple things in place, you will start off on the right foot and you will feel much more prepared when your phone starts ringing.

Related: Getting Started In Any New Real Estate Business

Do you have some other suggestions for things every real estate investor should do before they take that first call from a motivated seller?

 

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About Author

Sharon has been investing in real estate since 1998. She owned and operated a successful home inspection company for 17 years. In January of 2008 she took the leap of closing her business to become a full time real estate investor.

21 Comments

  1. I agree that follow-up systems will make or break you. The biggest item I would add to your list is your financing strategies. Will you ask the owner to carry, use a HELOC, borrow from family, get a new loan? If you don’t have this figured out, it doesn’t matter if one or fifty people call you back. If you can’t pull together financing quickly, all your work will be for naught.

    • Page –

      That is very true. Since I am a wholesaler that issue doesn’t affect me, but it definitely affects my end buyer. That is one of the first questions I ask; where will you be getting your cash?

      Thanks for stopping by.
      Sharon

  2. Thanks Sharon. Any suggestions for inexpensive/free CRM’s for beginners? Also, what should be on the “property information sheet” to talk to sellers about when they call?

  3. Sara Cunningham on

    Great tips Sharon. I worked in direct mail for a long time and know how well it works. We used to do a huge amount for mortgage brokers. One thing I think everyone should know that as you said it is a numbers game. The most effective way to get responses is to mail to the recipients at least 3 times a couple of weeks apart. It can be the same mail piece or a slightly different message each time that builds a story and let’s the prospect know what is in it for them. It must be the right message to the right target audience to maximize returns. What I do in investing doesn’t require this kind of approach but if it did I would certainly use it.

    • Hi Sara –

      I use direct mail and it’s my main source of leads. I mail to most niches until I buy the house, someone else buys the house or they ask to be taken off the list. The statistics for real estate are that 85% of your deals will come after the 5th mailing. For those folks that just send a few mail pieces, they are just wasting their money. Thanks for your comments.

      Sharon

  4. Thanks Sharon for another educational post.
    Can you suggest some lead sources that work (where to buy lists).

    • Kay –

      You can get many lists from Listsource.com. Often times your mailing company can also get your list.

      For probates, you will have to do some digging. Start by calling you local probate court and see if they have any information on how to get that information in your county. I hope this helps.

      Sharon

  5. Karin DiMauro on

    Thanks, Sharon! This is SO timely, as I’m currently ramping up for a marketing campaign and have been spending lots of time researching here on BP and getting those systems and processes in place. We gave it a go w/direct mail a couple of years ago, and I’ve since learned what we did wrong (after listening to podcasts and reading a bunch here). So I’m confident we can land a few deals this time.

    Can you suggest a place to find some wording for those letters and postcards? That’s where I’m currently stuck. I’m sure there are templates or something here on BP, am just not quite sure where.

    Thanks again!

  6. Great tips, Sharon!

    I tried this in the beginning of my career and it drove me crazy!! I’m not much of an admin type of person. It’s great you have a great system! :)

    The most exciting part was when folks called. And, I think many people starting out tend to panic when sellers call asking, “Should I pick up the phone or use an answering service?” Picking up the calls was definitely the least of my worries, I fielded them all myself!!

    Always interesting to hear and follow your experiences using direct mail marketing. It’s somewhat of an unexplored route for me. Thanks for sharing! :)

    • Rachel –

      I know you are really good at connecting with the folks at the parks in person.

      Did you ever consider sending out a monthly newsletter to the park managers? You could do tips, just write articles etc. And you could always end with “call me if I can” … and then tell them exactly what you want them to do. It would just be one more way to meet and connect with other park owners and managers.

      Thanks for your comments as always.
      Sharon

  7. Good idea, Sharon!

    I’ve actually never thought of that but have been doing it subconsciously (I guess!) through the tips I give (i.e. clearing up title issues, fix up advice, etc) when dropping by and/or on the phone. Usually, I’m not one to give advice unless asked!

    I’ll give it some thought. Though, I do wonder if they will take the time to read it!! Appreciate your help!

    p.s. I may be utilizing direct mail down the road. Venturing into land has been another option on my radar. Following your posts on direct mail marketing has definitely been educational and enlightening! :)

    • Rachel –

      I think they would if the topics are something that will benefit their bottom line. During the 17 years I owned and operated a home inspection business we used that strategy with a lot of success. We never used that tool to push our business. Instead, I filled the newsletter with tips that would benefit the real estate agent and their business.

      -We provided tips for curing common problems that would crop up in the home inspection so that they could tell their buyers “this is easy to fix”. You just get some … and do this….

      -We did tips for working with home inspectors, and I asked them to give the inspectors tips about how their business worked. We didn’t always know or understand their procedures and vice versa. The goal was to be able to be better able to work with each other for our mutual benefit.

      – General information about homes and their systems that would make the Realtor more educated

      You get the idea. Find some topics that would fit their particular businesses. Maybe it would be ideas to keep folks at their park. You would know better than I how that would ideas and information would work.

      Do an introductory newsletter to say “Here’s what will be coming your way every month or every other month” so they will expect it. Then keep is short at least for the first month or two; just a page or two at most.

      I don’t know how many parks you have, but I would mail an actual paper copy and follow up with an email copy if you can get their email addresses. Let them know how their newsletter will be delivered in print and via email if that is what you decide to do.

      Down the road, you might try to get the email addresses of the park occupants. Send them even a quarterly newsletter. You might also just make a flier type of newsletter and deliver it. You can get those printed in bulk at Office Depot pretty cheaply. You could do all kinds of tips for them on maintaining their home.

      You want them to remember you when they want to buy or sell. Over time you will build up a nice base of referrals quite easily. I still remember that tip you put out about the purple cleaner in one of your blogs. You will be building your business very organically.

      Just an idea for you.
      Sharon

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