Greatest Marketing Stratgey Ever Assembled?
Real Estate Consultant · Alpharetta, GA · Member since 2014 · 661 posts · 400 votes
Hey everyone,
So we do tons of rehabs well over 100 last 18 months or so. We been investing over 12 years so we have a lot of good knowledge and experience in RE.
But I want to see what BP Members can come up with, as the greatest marketing plan for finding deals that you could Buy-Fix-Sale. So, I want the marketing plan to be specific to target nice B or A areas that you could rehab and flip.
Our monthly Budget is 3k per month for marketing.
I want to try to come up with how you would spend the 3k per month if you were doing it.
Example:
Direct Mail 1k (focus on Bankruptcy and Probate leads)
Facebook Marketing $500
Bandit Signs $100 per month
Radio Ads 1k per month
Door Knocking $400 (1 guy 10 hours per week)
Anyways I would just like to see what BP Members could come up with as the greatest marketing approach for finding deals in an area. Not that it matters, but my area is ATL. I think the marketing concept would work at least very similar in every area.
All right lets do this!!
Personal opinion, (others may differ) I wouldn't use the Ready, Fire, Aim method. Pick one or two methods to try for at least six months to test market. Any shorter and you won't know what could have been very successful. Keep in mind that Response Rate is meaningless, close rate is what is important and many people forget that. Minimize the looky loos as much as possible.
Radio ads are expensive and not targeted. Thousands will hear the ad but few will remember the phone number to call. Cost per deal could be high.
Direct mail - Can be very successful but $1K per month is too low. Pick a very specific list. Probate, 50% or more equity, owns private notes, non-owner occupied, etc.. Then by Zip code, age, owns multiple properties, etc. Direct mail works only if done consistently for many months. It is true in real estate that most of your business will come from the 5th - 8th contact (letters, postcards, phone calls.)
Facebook OK if you are marketing to the under 55 crowd which won't be the high equity group, generally.
Bandit signs - can be very successful but almost all communities have laws against them. Plus neighbors delight in ripping them up. Also, must only be put out Friday evening and picked up Sunday evening to avoid the city code people and a fine. You will need to hire someone to do that or it's a big waste of your time.
Door knocking - one of my favorites. But again focus. Are you just wandering house to house and hoping someone wants to sell or knows someone who does. That can be successful but maybe not for the time involved. Pick a niche. I market this way to pre-foreclosure lists. Many of these people have disconnected their phone and few investors call on them. But the presentation is critical. Do not say "You're going to lose your house. Sell it to me." The last thing most people in foreclosure want is to move from their house. Instead, discuss what the options are for someone facing foreclosure to possibly keep their house. There are about eight or nine. (Hint, selling the house is last on the list. I don't mention it on the first visit.) You want to be seen as helpful, not as (in their mind) one of the vulture realtors who just want a listing, a greedy investor who wants to "steal" their house, or the slimy attorney who just wants $5,000 to file bankruptcy, 85 - 90% of which fail.
Bankruptcy - I market to this group, but several things to remember. It's very time consuming, expensive and complicated. You will never get a wholesale deal from someone currently in bankruptcy because the BK Trustee will insist that any sale be at a minimum of 90% of a BPO. The only purpose of the Trustee is to see that as many creditors are paid as possible. They have no interest in you getting a good deal. You will have to learn the federal PACER system www.pacer.gov which charges $0.10 per page to view the file documents. Trust me, this can add up very fast if you don't learn specifically what to look for. My first quarter billing was over $2,000. Now it's about $500. The only way to succeed is to market to people who have either had their BK case dismissed by the court (usually for failure to file documents timely) or if a lender files a Motion For Relief From Stay (because plan payments are not being made) AND the court grants that motion. Just filing the motion doesn't count. If either of these two happen the court is no longer involved, at least with the house.
I know a couple of very successful investors that run an ad in the local penny saver paper. It's not their only marketing, but it does get business. They buy a year's worth of ads at a time and have been running the same ad for many years.
I would ask the obvious question, if you are doing over 100 rehabs in 18 months, what marketing are you using now? That number would be considered a big success by many investors.
With a budget of 3K per month I would:
1. Assemble a team of about 10 VA's (from the philippines) to do the following task:
a. Do internet research to do the following:
i. Create a list of every waste management company in my farm areas
ii. Food Delivery
iii. Moving Companies
iv. Cable, telephone company, etc.
v. any other service that I can think of that drives around the areas of interest.
b. Once list are created they are to call each service provider and explain the incentive program to a principal of the business. the incentive program would be something like:
i. $2 dollars for a front picture and address of any (non duplicated from same company) property that seems abandon (closed, uncut grass, overflow mail box, etc.) include a cap per month.
ii. explain to the business owner that if he directs his employees to do this task it could mean additional cash flow for there business.
iii. once you have a list of business owners that get on the program, have the VA's follow up with them on a monthly basis.
c. once data starts coming in have the VA's compare the obtained list with a list of houses listed in MLS to ID houses not listed in MLS
d. Have VA's take the non MLS houses list and find out through public research who are the owners and status of such properties, ARV's, and other required data.
e. Have VA's create mailing list to market to these houses.
f. every month repeat process
2. Contact Divorce lawyers to explain a referral incentive plan
3. Contact bail bonds business to explain a referral incentive plan
I have 100 ideas to long to list....
For now since my budget is low, I do something I call "cash for fitness" which means that I go to my farming areas to:
walk for dollars,
run for dollars
bike for dollars
If I see a prospect I take a pic. with an app that will record the address and a later search it. Or if I see the owner outside approche them to give them my elevator speech and business card.
The plan that I explained can easily consume your $3k
Personal opinion, (others may differ) I wouldn't use the Ready, Fire, Aim method. Pick one or two methods to try for at least six months to test market. Any shorter and you won't know what could have been very successful. Keep in mind that Response Rate is meaningless, close rate is what is important and many people forget that. Minimize the looky loos as much as possible.
Radio ads are expensive and not targeted. Thousands will hear the ad but few will remember the phone number to call. Cost per deal could be high.
Direct mail - Can be very successful but $1K per month is too low. Pick a very specific list. Probate, 50% or more equity, owns private notes, non-owner occupied, etc.. Then by Zip code, age, owns multiple properties, etc. Direct mail works only if done consistently for many months. It is true in real estate that most of your business will come from the 5th - 8th contact (letters, postcards, phone calls.)
Facebook OK if you are marketing to the under 55 crowd which won't be the high equity group, generally.
Bandit signs - can be very successful but almost all communities have laws against them. Plus neighbors delight in ripping them up. Also, must only be put out Friday evening and picked up Sunday evening to avoid the city code people and a fine. You will need to hire someone to do that or it's a big waste of your time.
Door knocking - one of my favorites. But again focus. Are you just wandering house to house and hoping someone wants to sell or knows someone who does. That can be successful but maybe not for the time involved. Pick a niche. I market this way to pre-foreclosure lists. Many of these people have disconnected their phone and few investors call on them. But the presentation is critical. Do not say "You're going to lose your house. Sell it to me." The last thing most people in foreclosure want is to move from their house. Instead, discuss what the options are for someone facing foreclosure to possibly keep their house. There are about eight or nine. (Hint, selling the house is last on the list. I don't mention it on the first visit.) You want to be seen as helpful, not as (in their mind) one of the vulture realtors who just want a listing, a greedy investor who wants to "steal" their house, or the slimy attorney who just wants $5,000 to file bankruptcy, 85 - 90% of which fail.
Bankruptcy - I market to this group, but several things to remember. It's very time consuming, expensive and complicated. You will never get a wholesale deal from someone currently in bankruptcy because the BK Trustee will insist that any sale be at a minimum of 90% of a BPO. The only purpose of the Trustee is to see that as many creditors are paid as possible. They have no interest in you getting a good deal. You will have to learn the federal PACER system www.pacer.gov which charges $0.10 per page to view the file documents. Trust me, this can add up very fast if you don't learn specifically what to look for. My first quarter billing was over $2,000. Now it's about $500. The only way to succeed is to market to people who have either had their BK case dismissed by the court (usually for failure to file documents timely) or if a lender files a Motion For Relief From Stay (because plan payments are not being made) AND the court grants that motion. Just filing the motion doesn't count. If either of these two happen the court is no longer involved, at least with the house.
I know a couple of very successful investors that run an ad in the local penny saver paper. It's not their only marketing, but it does get business. They buy a year's worth of ads at a time and have been running the same ad for many years.
I would ask the obvious question, if you are doing over 100 rehabs in 18 months, what marketing are you using now? That number would be considered a big success by many investors.
I WOULD use the ready, fire, aim method. Here's why: Its no doubt that if you pick 1 or 2 methods you will see good success with increased focus. However, I would pick 4,5, maybe 6 methods to rigorously test for 6 months to isolate the critical few that generate the most deals. The 20% that leads to 80% of profits. Now I can focus on the 1 or 2 methods that I KNOW are profit inducing for the next 6 months, instead of just guessing.
These are some great marketing techniques! @Andrew Cordle I can think of only one thing that I might try with a 3k budget that you didn't already mention in your budget. Just trying to think out of the box.
I would consider doing something like vinyl car decals (but NOT on my own car). I would advertise craigslist and other sources for people that would be willing to put it on their cars. If a deal comes off of their car I would pay them maybe 5% of profits or something to that effect. I would just have the number on the car go to a Google voice and then have a spreadsheet of vehicle descriptions so I know what car the deal came from. With just 10 to 20 of those driving around, It would seem to me like a great lead source and would certainly have more longevity than bandit signs. I would love to hear criticisms of this idea. Good or bad?
l car decals (but NOT on my own car). I would advertise craigslist and other sources for people that would be willing to put it on their cars. If a deal comes off of their car I would pay them maybe 5% of profits or something to that effect. I would just have the number on the car go to a Google voice and then have a spreadsheet of vehicle descriptions so I know what car the deal came from. With just 10 to 20 of those driving around, It would seem to me like a great lead source and would certainly have more longevity than bandit signs. I would love to hear criticisms of this idea. Good or bad?
I like this idea, taylor, mainly because it is indeed thinking outside the box. There would be significant cost involved tho - if you're going to do vinyl with any significance it will be $500 to $750 per car (a full "wrap" is about $2K on up). But if you think of it like buying a billboard, it could make sense.
I have noticed that even people that license our brand will be hesitant to put even simple car magnets on their __________________ (fill in the blank: BMW, Audi, etc.). I always say, well, you surely set yourself up for failure when you refuse to tell people you are in business. So, I'm not sure how many people will sign up to have vinyl put all over their car if there is no guarantee they will make enough money to offset the fact that they now have your branding all over their car.
But I don't mean to be critical. I love ideas like this and thank you for sharing that one - good food for thought!
"Every time you take a risk or move out of your comfort zone, you have a great opportunity to learn more about yourself and your capacity." ~ Jack Canfield
I like that car idea I wonder if I just got some people on CL that would let me wrap there cars for 750 to 1k then pay them 500 a month or so. Once they are wrapped with a 6K upfront cost for maybe 5 cars. Then my out go would be around the 3k a month but I would have 5 or 6 cars driving all around my area.
I may put my team on that and maybe see if we could do something like that.
Very interesting.
AC
My initial thought was to just have something like a bandit sign type message with a number on the back window, that's it. This could be turned into an effective branding tool as well. Initially I was thinking back window only. Something simple and certainly as cost effective as possible. Something you could get on ten-twenty plus vehicles, maybe more and still be reasonable.
Thanks for the input! No worries about the criticism, It's welcome=) I totally see what you mean about people being hesitant to put stuff like this on their car. That's basically what led me to think of having other people do it for me. Personally I wouldn't want to be driving around with a car that says "we buy houses" or "sell your house now"...ect all over it. Not to mention, There could be some homeowners that might not appreciate you showing up at their house and all their neighbors seeing your vehicle and knowing they might be having some sort of hardship.
Sounds like you are going all in with something like a total wrap right? That would be awesome if you put something like this to work! Do you think that paying monthly is better than doing it on a deal by deal basis? There would definitely need to be some type of up front incentive. There's all sorts of ways you could structure the compensation, Does anyone have further ideas on this?
I was throwing some of these ideas around in my head and then a comment by @Will Pritchett has made me go full "wet blanket" (the part about great driving records).
Having been a recent victim of a head-on collision involving an individual texting while driving, I think the brand (if not business) liability is entirely too high to hire someone to drive around with my/your business information slapped all over their car.
Correct me if I'm wrong, but I think some of my brand 'luster' would be compromised if/when people see two small kids and a dog being pulled out of a totaled vehicle and the offending party has my business information all over it.
Just something to ponder.
The big problem with car decals are that they cause damage to the modern finish of cars. One person I know that tried that stopped after the second small claims suit and judgment for a complete paint job. Also, you never want the decal on older cars or cars with visible damage. Not a great image of a professional business.
So on newer cars lets say 10 years or newer the wraps are taking the paint off cars?
Do you think if I wrapped someones car with my logos and business and they they got in a car wreck for whatever reason that the other victim could sue my business? I am definitely following your train of thought.
AC
You're only spending $3K per month and consistently buying 5 houses? Time to start thinking about marketing to the Atlanta suburbs of Georgia.
No I was just using the 3k for an example budget I am trying to come up with a really good marketing strategy. And want to see what other people would do as well.
AC
Yeah, we aint buying that. Cat's out the bag already! LOL
I don't think $3K is a very effective marketing budget for someone to run a realistic full time business. $5K minimum and you can get some traction, but I bet you could go a month or more without any solid deals only spending $3K if your negotiation skills aren't up to par and you are not running a very targeted campaign. $3K is really more a of hobby level budget.
Are you talking 3k a month is low to be a full time wholeseller?
I am not trying to be a full time wholeseller, we do full time flips and am looking for another way to bring in more deals.
If 3k is a hobby level wholeseller what do you consider to be a Professional Wholeseller Budget?
AC
When I was a kid, I was asking a relative of mine who is a doctor, how much money he made or had in the bank. I don't exactly recall the conversation any longer. He looked at me and said "Name any care you like." Now, this was decades ago and there was no such thing as a Bugatti, at least I hadn't heard of one. I also don't recall which car I named, but it was something expensive, at least I thought so. He looked at me and said he could buy a few of them.
So, my response to you will be in line with what my relative said to me; outside of the Bugatti and other luxury import sports cars, if I took what I spent on my marketing budget so far just this year, there aren't too many cars out there that I couldn't have had parked in my garage right now. As a marketer, I know for every $1 I spend, I make X back. When things are slow, I simply spend more money. So, if you are spending $3K a month and buying 5 houses, the simple answer to get to 10 houses a month is to spend $6K.
none of what follows is remotely related to legal advice.
Of course they can, and likely depending on tort laws in your state, will. If you have quality legal representation, you can likely loop-hole your way out of it. At the very minimum, I imagine that it would be prudent to try and insure yourself somehow. It's an interesting idea, but IMO, there are too many variables (i.e., unchecked risk).
As for the topic at hand:
Maybe it's as simple as dedicating more $$ to researching trends using MLS data.
Where are cash buyers active?
Where are the spreads between cash purchases and ARV's improving over time?
Is it possible to use this information to get involved with trends in the early stages and focus your marketing effort around it?
Maybe I'm naive to think that most pro's aren't doing this.
People are always dying, getting divorced, in need of cash, have terrible tenants, etc, and need liquidity that real estate investors provide. The world provides an unlimited supply of distress.
Cool thanks for the input. I will keep that in mind.
I love your line "The world is always giving us enough of distress sellers" that is so true it seems that no matter what the market is there are always distress sellers.
AC
My refusal to get involved in laying out a comprehensive marketing plan is because whatever I say regarding who to market to, how much you should budget and what medium you should use is because what works for me in my market most likely won't work for you in your market.
I believe that marketing is an extension of your personality. If you are sending personalized pieces and it appeals to a seller, when that person calls he connects with you on a subconscious, personal level even before he picks up the phone. If you use my copywriting, there will certainly be a disconnect between what I write and how you converse with the seller. I've actually tested this in my own market and found it to be true. I mailed thousands of letters written by another wholesaler and had very little success closing deals using a piece that was working very well for him. When I did a split test and sent out a comparable quantity of pieces using my copywriting, same paper, ink color, envelope and stamp, targeting similar property owners, I had a much higher close rate and got better spreads on the deals I closed.
So, greatest marketing strategy ever? I don't believe it is possible for us to formulate one regardless of how many people contribute and how successful they are in their own markets. Of all the campaigns you've run, you can certainly look back and see which was your most successful, for you. I've been doing this for a while now and my methods are constantly evolving. I always feel like what I'm doing now is my most original, creative and greatest, then the next year roles around and I discover a whole new level of potential greatness.
It's like climbing a mountain over 10,000 feet; after you've been climbing for hours and hours, you're sure that what you see above is the peak, only to crest it and realize there is still a whole lot of mountain above yet to be conquered.
This is a primary reason why I believe people see success with repeated mailings. Say you own a house that you don't live in, and don't really have a need for it. When it starts to hit the fan, you need liquidity to unload an asset, not an agent hosting open houses to market themselves (j/k agents). Eventually a handful of people that you have dutifully and thoughtfully followed up with will be faced with a desperate situation.
I believe that @Aaron Mazzrillo is dead on in his assertion regarding the correlation between marketing budget and deals. With a 5k budget, your sample size has to be close to 10,000/month (completely pulling this number out of the air)? You can make some pretty strong inferences based on that amount of data.