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5 Reasons You Need to “Just Say NO” to Bandit Signs!

by Chris Feltus on June 6, 2014 · 14 comments

  
Bandit Signs!

You’ve seen them on the corner of a busy intersection, in neighborhoods, stapled to telephone poles  and spammed throughout entire areas, covering everything with corrugated plastic… you know what I’m talking about, bandit signs.

I firmly believe that you have to run your business in an ethical and legal manner. These signs are part of the reason that real estate investors have a bad reputation.

Just Say NO to Bandit Signs!

Not only are they illegal in most areas, but of the several colleagues I know that use them regularly, tend to generate mixed results using them at best. Besides there are countless other legal avenues to pursue to find motivated sellers or joint venture partners for your wholesale deals.

Related: Bandit Signs: The Ugly Way to Advertise Your Real Estate Business

1. Legitimacy

When you think about it logically, not only are they a visual sore but how much rapport can you really build with a seller using bandit signs?

Think about it, they are calling you from sign they found on the side of the road that’s likely written in large tacky black marker. Now imagine if I show up at the same house as you, and the seller found me through direct mail or online marketing, I guarantee you that I will beat you out on the house. Why?

I have been building rapport with the seller for months either through direct mail or online PPC, and have done so in a professional manner. They are familiar with who I am, what I do, my brand and how I can help them.

Just think this is real estate, one of the most expensive assets a person owns, and the individuals that need to sell at a discount usually have problems in their life that are motivating them to do so.  Who do you think they are more likely to trust and sign a contract with at the end of the day?

2. The Effectiveness or Lack thereof, using Bandit Signs

I am not going to stand here and preach that bandit signs won’t work and generate leads, the truth is they will. HOWEVER,  the leads generated through this method tend to be tire kickers.

Think about it, you are a posting signs at busy intersections. You have no filtration method to “prequalify” your leads. As a result, as many of my colleagues will attest,  you will generate a lot of leads for lack of a better word, are garbage.

The last time I was out driving I saw a bandit sign advertising health insurance, does that sound legitimate to you? It shouldn’t, and using bandit signs with real estate won’t either.

Wouldn’t your rather have leads that are motivated, with equity and targeted by your farm areas? You can by driving for dollars or using direct mail marketing to achieve this.

3. For You Wholesalers…

Good relationships with buyers are forged here on Bigger Pockets, REIA meetings and by getting good deals.

I thought about posting one of my latest deals on a major REI deal syndication website, just because I was curious.  Before I hit the submit button it gave me the option “blasting it to their buyers list for only $250”.

I laughed. This is just as silly as trying to build your  cash buyers list by carpeting streets with signs. Save yourself some money and start building some lifelong relationships here on BP instead.

Truth be told, you only need a handful of buyers, not a list of 1,000. The proof is in the pudding as they say, as I have closed several joint ventures with members here on BP in the last month alone.

4. Besides its Not Legal

Related: BP Podcast 008: Learning to Be a Profitable but Ethical Landlord with Al Williamson

Bandit signs are illegal in many areas o f the US. Justifying the use of an illegal tactic to market your business is still justifying illegal activity, and really should not be tolerated.

I don’t care what gurus use them or anyone who uses them or who used them to get started they are still illegal and I stand by my opinion. Not only that, they  damage both your reputation.

In the Dallas-Fort Worth area, code enforcement is incredibly vigilant. In fact, they will set up traps for people that use bandit signs. They will set up fake house appointments, and when you show up, you are fined. People often use throw away numbers so code can’t catch them, but they are still finding other ways to deal with this issue as you can see.

5. I Have Seen the Light

If you have seen the light from this post and you need help getting some ideas on what to do next to build a solid, legal and EFFECTIVE foundation for your business let me help you get started.

Please refer to my ultimate guide on driving for dollars part 1 and part 2 and my in-depth guide to setting up a direct mail marketing campaign  and start putting your marketing dollars to work to build a successful business. Wishing you all the best, now let’s all go out and make a bandit sign bonfire.

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{ 14 comments… read them below or add one }

Jason Ligon June 6, 2014 at 9:45 am

I keep hearing and seeing the bad press within Bigger Pockets about bandit signs. I just don’t get it. What’s everyone’s beef with the bandit signs besides being sometimes unsightly. Sounds like more of a personal preference than a real issue. As long as people are following the local laws what does it matter? If they aren’t effective then that’s not your problem. It’s the person wasting money on the signs problem. What did bandit signs do to hurt you?

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Travis Weston June 6, 2014 at 12:38 pm

The thing about it is Bigger Pockets is a website dedicated to helping people make the most of their real estate business. Bandit signs have a track record of gathering bad leads and being unsightly. Those who post here are doing so to teach, and use their experience to guide those new to the industry. That said, given the large number of posts about bandit signs, it would stand to reason that it’s not an isolated concern.

Personally, I’ll be staying away from using them. I like online marketing, myself.

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Chris Feltus June 7, 2014 at 10:19 am

Couldn’t have said it better myself Travis, very much agreed.

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Jeff Brown June 6, 2014 at 10:42 am

I’ve often wondered how ‘investors’ would explain how breaking the law was still ok as it pertains to bandit signs.

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Wayne Woodson June 6, 2014 at 12:01 pm

I have used them in the past but no longer. In my market they get taken down too fast, they are expensive, and they aren’t as effective as other marketing methods. I don’t really care for the “fines” from the codes dept but that can be avoided most times. To me it’s not worth the money but that’s just my 2 cent.

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Chris Feltus June 8, 2014 at 3:04 pm

Wayne you are absolutely right. Even if bandit signs were legal, they are an ineffective marketing tool in my opinion.

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Dennis June 6, 2014 at 3:28 pm

If you want to see just how ineffective bandits signs really are, call a few of the folks putting them up. As an experiment I did so, 95% of the folks never called back. The few that did were all newbies, trying to pitch me some lame brain seller 100% financing or lease option scheme. I would bet most are the result of some guru blowing into town.

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Chris Feltus June 8, 2014 at 3:04 pm

At Dennis, yes you are correct that has been my observation as well.

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Scott June 7, 2014 at 12:17 am

Travis,

Can you please tell me what type of on-line marketing you do? Any where do you advertise on-line? I’am a newbie to investing so any help will be great! Thanks. Scott

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Chris Feltus June 8, 2014 at 3:03 pm

Hey Scott,

Google adwords. If you want to learn more about it, I recommend you read up on it, there is way too much to get into here about it.

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Mohammad Asaduddin(Asad) June 7, 2014 at 6:48 am

Hello neighbor (I am in Houston), what you say about bandit signs makes sense. I have done driving for dollars and direct mail but never been able to do multiple deals a month. I will definitely look into your write ups on these.

Thanks.

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Chris Feltus June 8, 2014 at 3:02 pm

Hey Mohammad, Glad you found the article useful. To get deals consistently its all about generating enough leads on the back end so you close enough on the front end, take care.

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Shaun June 14, 2014 at 2:27 pm

Not going to disagree at all with the legality or the total lack of professionalism that they convey.
I’ll also put the disclaimer that I have never used them and don’t have any immediate plans to ever try them.

However I don’t get the “ineffective” argument.
Doesn’t every person that contacts you pre-qualify themselves as someone that has some interest in selling a house?
Pretty cheap leads as a sign won’t cost you much more than a couple of letters if outsourced.

Driving for dollars: Just because a house looks like a piece of crap doesn’t mean they want to sell.
Direct Mail: Just read on a forum that there is no such thing as a list of motivated sellers. Great way to think about it. The fact that getting something like 10% response will get people swarming you to find out what you are doing shows it is throwing it up on the wall to see what sticks.

Again I don’t do signs but have known lots of people that do well with them.

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tony June 21, 2014 at 8:01 pm

Sorry guys i have to dis agree with the whole bandit sign argument

So for the ugly part….. hows about i put up pretty blue and white ones… which work much better for me then the yeller ones… i am then ok?

Now lets talk about legal and illegal… really ? How does something become legal or illegal? In fact could someone please define legal and or illegal with out using the word law or lawful and legal or illegal?

Even if this is the case where a bunch of old white guys decided what was good for the whole bunch of folks in their community (a clue for the question above) then every politician thats hanging their damm bandit signs out on every street corner in the planet is acting in an illegal manner or better yet being a hypocrite because they are probably the ones that made the law against the very same bandit signs that they deploy to get re-elected just so they can make more laws that only benefit them and their friends

Bandit signs work well for me… cheers

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