Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
We have been marketing now for 4 months (and worked on investing through the MLS for 2 years prior to that all with having never made ANY money!) and have very thankfully built a system that is producing consistent leads every week. We had initially had solely a fix and flip approach, but noone responded to an offer lower than they expected and the conversation would shut down quickly. We have transitioned into a "full-service" approach and now offer to buy with cash, wholesale, or list properties, whatever best fits the homeowner's situation. We are now able to move the conversation a couple steps further with many more leads. We can take the lead all the way through property viewing, multiple conversations and the homeowner being on board. But when it comes time for them to sign a contract, every lead gets nervous, never signs and stops returning phone calls. Can anyone PLEASE give us advice of how to get the contract signed, mainly any verbal statements that you have found helpful?? We are so close and still feel so far away.
Rehabber · Philadelphia, PA · Member since 2013 · 38 posts · 15 votes
12y
I used to think A LOT OF LEADS was the key to success in real estate. I would get happy when lots of people call, however I found myself going to too many appointments and having too many conversations about real estate.
My goal as an investor is to buy house that need renovation ONLY.
I market ONLY for houses that NEED REPAIR. When the Sellers read my ads, I hope they DON'T CALL ME-if they have a NICE HOUSE.
I want only the worst houses that are NOT MARKETABLE TO RETAIL BUYERS.
The houses I buy will NOT QUALIFY for a mortgage, so my ALL CASH OFFER IS THE BEST AND ONLY OPTION FOR THE SELLER.
My success in this retail fix & flip business is built on a fewer number of BETTER LEADS.
Leads from people who are selling beat up houses (usually vacant and/or estate sales) and who know that I am their best option-a Cash, AS IS Buyer.
Rehabber · Philadelphia, PA · Member since 2013 · 38 posts · 15 votes
12y
I used to think A LOT OF LEADS was the key to success in real estate. I would get happy when lots of people call, however I found myself going to too many appointments and having too many conversations about real estate.
My goal as an investor is to buy house that need renovation ONLY.
I market ONLY for houses that NEED REPAIR. When the Sellers read my ads, I hope they DON'T CALL ME-if they have a NICE HOUSE.
I want only the worst houses that are NOT MARKETABLE TO RETAIL BUYERS.
The houses I buy will NOT QUALIFY for a mortgage, so my ALL CASH OFFER IS THE BEST AND ONLY OPTION FOR THE SELLER.
My success in this retail fix & flip business is built on a fewer number of BETTER LEADS.
Leads from people who are selling beat up houses (usually vacant and/or estate sales) and who know that I am their best option-a Cash, AS IS Buyer.
Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
12y
@Account Closed Great advice, thank you! Are there also specific closing statements that you use that encourage a seller to sign the contract??
Even when we were a solely fix and flip business, we would communicate with a seller that only had one option like you say, but the competition is so huge here, that they would hang up and call 2 other investors and get a better offer. Even with motivated sellers who only have one option we are still missing something, can you give me any further advice. Thank you!!
Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
12y
Advantages and disadvantages to the "Full Service" approach.
Obviously there is a better chance to monetize leads that don't fit your exact model, but there is the downside of spending a lot of time dealing with leads that don't fit your exact model.
I think that @Account Closed has a good point to try to market directly to the people that have trouble properties where an investor with a cash/private financed offer is the best (and possibly only) option. Joe also has a point that you want to make your offer as clean as possible. The more outs you have the less attractive it is.
Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
12y
@Shaun Reilly @Daniel Breslin
Well, here's the thing. At the rate we were going, based on our stats of marketing dollars to calls to leads to deals, it would have been upwards of a year before we were able to get a flip in this market and we would have run out of marketing funding much much sooner than that.
We are marketing in the exact same way now that we were then. We have the time now to recover some money from using other methods without distracting from building the business towards a solely fix and flip model. We just have to get our foot in the door. Our thought is that this is what we need to do to get into this HIGHLY competitive and active market.
But if you guys have ideas of how to generate more funding for the marketing and decrease the amount of time it would take to get a rehab deal I'm all ears!
Developer · Andover, MA · Member since 2008 · 1k+ posts · 489 votes
12y
This sounds like it's more of an issue with your lead list. How are you coming up with your list? Who are you marketing to?
I disagree with Daniel in the sense that I market to motivated sellers. I don't care if the house is in great shape or bad shape, as long as they are willing to sell me the house for my offer price. When you talk to a truly motivated seller, you'll notice that the cash is secondary to their main issue. Whether they inherited a property, are dealing with medical issues, can't keep up with the maintenance of the property, etc. they just need to get rid of the house and move on with their life.
Rehabber · Philadelphia, PA · Member since 2013 · 38 posts · 15 votes
12y
My stats improved when I changed my approach to attract only sellers of certain types of property-vacant and needing repair.
I changed my methods of marketing once I observed that the things I was doing to attract deals just did not produce the correct result.
Credibility and confidence closes deals.
When I talk with the seller about the several rehabs I am doing(to not boast,but subtly work funny stories or even horror stories about my contractors naturally into my conversation) they know they are dealing with someone that will close the deal.
Sellers are making the largest deal of their life and are afraid of making a mistake. When you communicate your key with confidence, their fears will be alleviated and they will feel more comfortable going through with what you are offering.
On the other hand, if you sound unsure of your offer, the seller will not call back or sign the deal. Especially if the offer includes things like lease option offers, or trying to describe wholesaling.
My experience has been that sellers want a cash as is offer pain and simple.
Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
12y
Originally posted by @Account Closed:
I used to think A LOT OF LEADS was the key to success in real estate. I would get happy when lots of people call, however I found myself going to too many appointments and having too many conversations about real estate.
My goal as an investor is to buy house that need renovation ONLY.
I market ONLY for houses that NEED REPAIR. When the Sellers read my ads, I hope they DON'T CALL ME-if they have a NICE HOUSE.
I want only the worst houses that are NOT MARKETABLE TO RETAIL BUYERS.
The houses I buy will NOT QUALIFY for a mortgage, so my ALL CASH OFFER IS THE BEST AND ONLY OPTION FOR THE SELLER.
My success in this retail fix & flip business is built on a fewer number of BETTER LEADS.
Leads from people who are selling beat up houses (usually vacant and/or estate sales) and who know that I am their best option-a Cash, AS IS Buyer.
I wish I could have voted for this post MULTIPLE TIMES!
I don't think you can convert leads into deals. Deals are deals. Leads are those things that keep you busy and make you feel like you're doing something positive. Sellers convert leads into deals buyers don't.
Over the years I have learned that no matter what ones says to a seller one cannot buy at the percent's we must unless the house is already a deal. In reality Helen Keller can close "Deals".
All that you have to do is ask and have answered these three questions and the deal will reveal itself...
Do you have a house that you need to sell?
What is the value of the house?
What amount are you wanting to sell the house for?
People will actually answer Q3 with an answer of 50% of Q2. If they don't get close then its not a "Deal".
Like @Account Closed
I too believe that there is a ton of value in limiting the calls to motivated sellers and only marketing to highly likely Junky houses. It cuts down on the frustration of being an investor...
Trainers wouldn't teach this because its too easy...
Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
12y
Great advice thank you everyone! So, currently we are marketing to absentee, out of state high equity sellers (direct mail - 600 addresses) and distressed houses (through street signs and driving for dollars. I am about to start mailing to delinquent tax sellers as well. How would you guys change this if I were to better market to more motivated sellers. I really appreciate all your feedback. I can sense that we are getting really close, but man, this business is difficult!
@Michael Quarles I really appreciate some of the details as well. It makes a lot of sense what you're saying.
Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
12y
@Amanda Fox Just to give you a bit more confirmation. I agree completely with what has already been said. There is NOTHING you can say to create motivation. A seller either wants or sell or they need to sell. If they need to sell and what you have to offer is a fit, then you have a deal.
Real Estate Professional · Falls Church, VA · Member since 2012 · 238 posts · 83 votes
12y
Agree with Michael Q. etc about a deal being a deal. In addition, Justin S. had a good point about reviewing your lists.
List thoughts - are you screening your out of town lists to include target neighborhoods with more distressed properties in general, rather than upscale neighborhoods where out of state owners have lots of cash and options for their properties? A subdivision or zip code review might be in order if you haven't already. You might also need to expand your geographic area so you get enough median-sales-price-and-below homes. I've had good luck with delinquent tax mailings, hope you do too.
Also - are you mailing to the same people multiple times, and do you put the ones who call you on a regular call-back schedule? I spoke to a man yesterday who told me in October he'd sold his house, but I followed up and turns out he hasn't and my offer is looking better. Keep politely checking in with them until they've sold!
If you want to post your mailer here I'm sure others would be happy to give input on that as well.
Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
12y
@Alison M. Thanks for all the advice! We are already 5 mailings in with the absentee mailers, but it may still be a good idea to scrub the list more. I'll talk to my husband about that idea. We do intend to continue sending our mailers indefinitely until a seller either moves into the house, sells the house or asks to be taken off the list. We do have the ones that called us on a regular callback list, and I've definitely underestimated how beneficial these leads will be as they continue to build over time.
Am I understanding everyone correctly that their is absolutely nothing we can do to better communicate during negotiations with a seller. There is NO psychology behind that communication? I'm finding that hard to believe, but you guys are obviously way ahead of me in experience and I can't argue with that!
Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
12y
@Amanda Fox Sort, don't convince. Motivated sellers are created by circumstances, not by you finding the 'right' words to communicate your offer. Keep your offer simple and to the right person it will sound perfect.
Investor · San Antonio, TX · Member since 2013 · 153 posts · 36 votes
12y
Make offer on the spot and write up contract in front of them..
To do this, find out as much info as possible before you spend countless hours driving around visiting and talking to people who don;t have any interested in selling at the numbers you need.. You need to be confident and decisive in your offer and expain why you came to that offer..
you can also monetize the leads that dont work for you by selling those to real estate agents...
Real Estate Professional · Falls Church, VA · Member since 2012 · 238 posts · 83 votes
12y
The psychology part for me is to just stay in touch with callers who are not ready to sell today, but may be in the future. Keep mailing to them and put them on a call-back schedule. It's taken me over a year to develop some leads from call to close.
Do you have a good lead-tracking system or methodology for following up? It doesn't have to be fancy or expensive, it just has to work for you. I use a mash-up of Microsoft Outlook, Excel, and a white-board system. There are also threads here on BP about CRM and lead-tracking systems. If you don't save your leads and callers then you're wasting part of your marketing money.
Orange, CA · Member since 2012 · 66 posts · 17 votes
12y
@Amanda Fox I don't think anyone answered your question about your list, or maybe I missed it. So here is goes. 600 absentee owners isn't enough.
Mail at least 1000-2000 per month. Mail people repeatedly, as much as you can afford. Target who you mail to as good as you can. Mail to absentee owners, 50-100 percent equity. Depending on your market, weed out the last sale date at least 7-10 yrs.
I'm giving post cards a try, because I'm going to start mailing every 6 weeks and its too expensive to do my letters. If you do letters, make sure they are hand addressed with a regular old forever stamp.
Read some Dan Kennedy books on Direct Mail. I got a lot from those. Also read some of Sharon Vornholts stuff, shes amazing.
Also, why do you need them to sign a contract? As soon as you both have an agreed price say "Ok, the next step is I will have my escrow company contact you today/tomorrow so we can open escrow and get this ball rolling so you get your money as quickly as possible." Then call your escrow and tell her you agreed to buy the house as-is at whatever dollar amount and she will type escrow instructions that will supersede any contract you would have had signed anyway.
I'm still pretty new but had some luck with direct mail and hoping to have more. :)