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

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It didn’t feel right.  As I walked out of the print shop with 50 signs I couldn’t help but wonder if this plan would backfire on me.  The huge decal on the back window of my Ford Expedition, the cheap little classified ads in the local Super Shopper – and now this.

Little white signs with big, bold black lettering.    WE BUY HOUSES.

I paid $600 to a real estate guru that promised me this marketing campaign would be effective.   All I needed to do was plant these corrugated plastic advertisements on every corner of the city and wait.  He said the phone calls would pour in.

Still, I was skeptical.  Could this really work?  Was it that simple?

Sure enough, within hours my phone started ringing.  Nothing too worthwhile at first but the response was encouraging.  I could sense that a juicy deal would be coming soon.

Bandit Sign Success?

The next day it finally happened.  The caller really wanted to sell her house.  She had lots of equity.  And she wanted to meet with me right away.  Slow down I said.  Before we could set an appointment I’d need the address of the house to do my research.  I asked if I could see the property later in the day.  I couldn’t commit to an offer price until I did an inspection.

Suddenly, the conversation took an unexpected turn.  The voice on the other end of the line went from desperate to demonic.  This woman wasn’t a motivated homeowner after all.  She was a code compliance officer for the city of Chandler.

Did I know these signs are illegal, she asked?  And that each sign carries a fine of $1,000?  Gulp.

She made me a deal – remove all the signs by the end of the day and I’d be off the hook for the fines.  So I went out and picked every one of them up, which was hard to do with all the egg on my face.

That was about eight years ago.  Nowadays when I see a WE BUY HOUSES sign I can’t help but think of my code compliance officer friend.  Bandit signs, as they are known in real estate investing circles, are illegal in most metropolitan areas.

They are also very ugly.  As responsible real estate investors we should be cleaning up our neighborhoods, not littering them with illegal signage.

Besides, have you seen the types of businesses that advertise along the roadside these days?  Cheap bankruptcy, credit repair, dog grooming, diet supplements, mixed martial arts lessons.  Yuck.

Bandit signs can be effective.  Even profitable.  A few in the right area of town might make you a few bucks.  But it’s the wrong way to do it.  With social media, websites, Google Ad words, CraigsList, direct mail and email campaigns it’s never been easier for real estate investors to advertise inexpensively and without breaking the law.

About Author

Marty (G+) is the Chief Financial Officer for Rising Sun Capital Group, LLC, a real estate investment firm based in Gilbert, AZ. His firm purchases homes at the courthouse steps and public REO auctions. They have two exit strategies, either fix and flip or seller financing.

43 Comments

  1. Marty – You and I are in complete agreement on the bandit signs. While they may be effective, 1) they are a blight, 2) they are largely illegal, and 3) as a result of 1&2, they make real estate investors look bad to the communities we’re looking to improve.

    I don’t see the practice ending, but do predict that municipalities will work much harder at busting investors for their signs, as doing so provides a nice revenue stream.

    I believe that our goal as investors must be to elevate our industry and hope that people realize that bandit signs and other bad practices are some reasons why investors have a bad name.

  2. Great article. In Riverside, the fine is $100 per sign. I’m sure somehow it’s $100 per sign per day. many of the bandit signs have generic voicemail lines. I’ve never heard of compliance posing as a seller. Yikes!

    There are other legitimate ways to do sign advertising. Good old billboards will do the trick. Might be more expensive but there are several around here that aren’t very expensive and aren’t on the freeway. They’ll stay up longer and you won’t be contributing to litter.

  3. Chalk it up to a lesson learned… =]

    My favorite ads that I see are the real estate agents that do the bus stop ads… lol … I don’t think this is the ideal demographic to be targeting, especially in San Diego, where the average price of homes is $450,000+.

  4. You’re absolutely right. It’s not very good to annoy people. However, there is an abuse even in the online world. I’ve seen many people who put all kinds of nasty popups and annoying ads and i don’t really know how they are going to build a business out of that. Building a business requires that you care about your customers. Like you said, with social media today, you could literally get leads and sales in a very friendly manner. Many people are already considering real estate investors as “evil”, so we should work on that picture to make it better not worse.

    Thanks Marty;
    M Stephanie

    • Stephanie – You’re right; many investors do bad things online as well. From the pop-ups to spamming sites like ours to email spam, these guys leave just as bad a mark as those people who litter our neighborhoods with illegal signs.

  5. I agree that bandit signs can definitely be a blight, and not exactly the cleverest way of advertising since you’re also letting the authorities know how to contact you. And I agree that there’s plenty of ways to advertise online, but I don’t agree that it’s easy, and it can cost way more than putting up signs.

    AdWords is getting ever more expensive, and so is other forms of online advertising as more and more advertisers migrate online. Plus AdWords is a struggle to run profitably for even experienced marketers (and Google is not making it any easier with their almost random banning of accounts) so unless it’s something you really want to spend a lot of time and money getting good at, it might be best to outsource such work.

    There’s good and bad PPC (pay per click) and SEO (search engine optimization) businesses so buyer beware. Some will allow you to choose a number you’re willing to pay per lead and your advertising costs won’t go beyond that. Of course, if you want to pay $1 per lead in a highly competitive market, you likely won’t get far since the competition paying much more per lead will be far more visible online to prospects.

    • Jon, I didn’t have time to write about what I DID do after this happened. Since bandit signs were forbidden I started door knocking – 60-80 doors a weekend. It was hard work but paid off for me big time. I closed about 40 deals in 18 months without using any bandit signs or internet. I have a feeling this technique would still work today.

  6. I think that bandit signs are great for certain areas. Unfortunately they just don’t work everywhere. Near San Francisco, some of the cities have fines as high as several hundred dollars per sign. If you’re going to chance it you better have a telephone number that can’t be traced back to you (using some third party).

  7. I agree that bandit signs are a blight on the city. They look terrible.

    But how do politicians justify it? They put out 100 times more signs than a single investor could ever dream of. And what about the person working a low-paying job who does not have the money for PPC and Newspaper ads? Bandit signs are a much cheaper form of advertising than any other marketing tool. This person was me actually. I started out with bandit signs some years back because it was all I could afford and it helped to launch my investing career. I would never have been able to come up with the $3-4000 per month I now spend on other forms of advertizing while working a minimum wage job. And now I’m wholesaling 10-15 properties per month.

    Perhaps there is a middle ground somewhere, but I don’t see people stopping with bandit signs anytime soon.

      • Marty,

        Can you share how you pull so many deals from just door knocking? Who do you target? What do you say? Maybe you should write an article on that? I want to stop doing signs but I need to feed my family first. Thanks!

  8. Marty, Thanks for writing this blog!!

    Having a low budget is not an excuse for breaking the law and trashing the city with signs. There’s a good reason they’re against the law and that’s because they’re a horrible eye sore. Not to mention that the “businessmen” (and I use that term very loosely – no offense to the real businessmen and women) always seem to be able to put the signs up, but never bother to take them down. That means that we the taxpayers have to pay a city worker to go around and take them down.

  9. If they look so bad, the politicians shouldn’t do it. As long as our politicians use bandit signs, so will I. The double standard in the law that most municipalities have that says politicians can do it but nobody else can just flat doesn’t work for me.

    • Brad, I completely agree. I am new to real estate investing, personally. I just put out my first batch of yellow letters and I do plan on marketing via bandit signs as well. The way I see it is if someone calls my number with a complaint about the appearance of my sign on their street I will most likely take it down out of respect for that individual, but I will not be threatened with extortion because some bureaucrat says he doesn’t want people to be able to advertise without a violent monopoly getting tax dollars out of it. Bandit signs are a victimless crime and I don’t entertain the believe that these people have the right to rob me over a crime with no injured party.

  10. I am Realtor who utilizes bandit signs! I use these signs to produce buyer leads on my low end properties. This is a great lead generating tool that I have been very impressed with. In my area we are allowed to put the signs up on Friday after 6pm but we must pick them up by Sunday evening. Yes it is a pain and time consuming to put out 100 bandit signs and then pick them up a couple days later, but the payoff is great. I sold 4 houses in one weekend by utilizing these signs the LEGAL way.

  11. My early experience with bandit signs was good and bad. Legally the chief of police or other city official would contact me, some wouldn’t. As bandit signs from competitors became more prevalent in St Louis the rules changed. After several phone calls from the authorities progressed. I decided to call each city I wanted to canvas. Wow they were finally on my side. Of the 25-30 key areas all of them said to put them out Friday night/Saturday morning and take them down Sunday night. What a change in their attitude when I initiated that little idea to speak with the city regarding my intentions. So for your next ideal of bandit signs contact the municipalities and ask them for permission and good success to all.

    • Wow Tyrone, an extra 100K a year? How much do you make without bandit signs? Is your core business real estate investing? I could make an extra million a year selling drugs but I don’t do it because it’s illegal. Just because you make more money doing something doesn’t mean it’s the right thing to do.

  12. I love using bandit signs and will continue to use them. They are only illegal in SOME parts in my town (mostly the very nice areas). It’s stupid to assume EVERYBODY uses internet real estate classifieds, so I use bandit signs to advertise my house buying services, or have nice bandit signs pointing to a house I have for lease option as a nice supplement.

    If its extremely illegal to use bandit signs, then I wouldn’t see a RE-Max, Coldwell Banker, Keller Williams, etc etc. sign every 5 blocks with a nice picture of a real estate agent or broker with his/her name and phone number because the company would be getting fined for every sign they put out.

  13. Fuck city rules and ordinances that shits a waste of time. Its all these stupid ordinances in the first place that cause businesses to go under. Then you know what happens? Crime, thats what. Homes get robbed, wives get beaten, children get beaten… all because people couldn’t tolerate some signs in their town.

    So next time you want to complain about a “bad image” think about that. Which headline would you rather read?

    “Real estate agent gets fined for spamming town with 10,000 signs”

    ORRRR

    “Real estate agent gets life for murdering his wife and kids, then setting home ablaze”

    All thanks to our stupid local ordinances. NJ pays enough money in taxes as it is but I never see them doing crap to clean up our roads. They keep fining fining fining, then where the hell does all that money go?

    I’ll tell you where. The pay more cops and make more rules so they can make more stupid laws and fine us even more. Meanwhile we have potholes in our roads, garbage everywhere, and people have the nerve to complain about signs of all things. Everywhere I go there are signs, so a couple extra bandit signs aren’t harming anyone.

  14. Rommel Crabtree on

    I read your story and all the comments (twice) with great interest. Thanks for posting it.

    I’ve studied this issue and thought I could add to the discussion. While the topic of “snipe” signs is broad, (covering law, enforcement mechanisms, politics, facts regarding their use, the US Constitution, and proper behavior in a civil society), I’ll cover the law for now and if time allows (and if the dialogue appears worthy), perhaps I’ll return with comment regarding the other elements.

    Let’s start at the top of the legal food chain (so to speak).

    The U.S. Dept of Transportation, Federal Highway Administration publishes the MUTCD, or Manual on Uniform Traffic Control Devices for Streets and Highways. Among other things it contains the language that prohibits advertising in public right of ways. Every State has formally adopted the MUTCD just as each State adopts National Plumbing Codes or Building Codes and so forth. If you read the sign code of each State prohibiting signs in public right of ways you’ll note the similarities to, if not the outright copying from, the MUTCD.
    In addition to the MUTCD there is the Highway Beautification Act of 1965. Some of the language of that Act is also borrowed into State codes but more importantly each State is subject to losing ten percent of its federal highway funding if it fails to accomplish the objectives of the Act.

    Every State therefore has laws that prohibit signs in right of ways. And incidentally, this includes political signs. If you read a lot of sign code you’ll find that political speech gets more leeway than commercial speech, but the line is drawn at the public right of way.

    All municipalities follow suit in prohibiting these signs, but some have the “weekend exception”. However, General Public State law of this nature usually trumps local law. But most States follow the MUTCD lead with “and no Authority may permit any” language in their statutes. Thus, as an aside, I believe as a legal matter for this and other reasons, these exceptions could be successfully challenged by any Citizen or group of Citizens who choose to dedicate the time and resources to a challenge.

    But exceptions or no, no local ordinance can legitimize signs in public right of ways that are not under their control and no State permits signs in the public right of way other than those placed by the State agency in charge of that right of way or authorized agents on their behalf.

    Thus even where local code provides a weekend exception for temporary signs in right of ways such code usually specifies that the exception only applies to local roads under the control of the municipality in question. Further, these codes usually specify numerical limits, such as four or six signs for any one enterprise. Again, I think code like this can be struck down, but it is what it is – and only what it is. That is four or six, only local. Not hundreds and not in public highway right of ways beyond their jurisdictional control.

    And to be clear, no code, anywhere in the U.S. allows any advertising, (political, commercial, public info [lost dog], any) to be attached to any object that is lawfully in the right of way. No painting on rocks, no stickers on traffic control structures, no stapling anything to utility poles. No anything, on anything at anytime.

    How the law is enforced is another matter but that’s the law as regards “snipe” and/or “bandit” signs.

  15. Chris Bounds on

    IMO if it’s legal then it’s on the table. It’s certainly effective if done well. Real estate agents use them all the time, although in a more direct manner vs. spamming a while city. A “bad image” seems to be debatable. I don’t like salesmen coming to my front door, but I don’t despise them. Others hate those people. As for bandit signs near my neighborhood…I don’t like them, but it doesn’t make my head spin. Heck, they even work on me sometimes. If I need an oil change and I see a $24.95 special then I’m pretty happy about that bandit sign. And motivated sellers might be just as happy about a We Buy Houses sign too sign if they see it in the right place at the right time.

    With all that said I’ve been scolded by a sign cop before. I won’t be placing signs in that city again, but I’m not abandoning bandit signs completely either.

  16. “As responsible real estate investors we should be cleaning up our neighborhoods, not littering them with illegal signage.”

    Isn’t that what we doing? Renovating homes and providing housing lol first of all no wonder you had no luck? 50 signs….wow what a huge campaign you did. What did you do put out 10 a week. I do 2000/month and you posted in chandler. Hmm no wonder they called you. I’m no genius but doesn’t take someone with brains to know if you post signs in scottsdale, PV, fountain hills or chandler you will for sure be getting phone calls from officials. 90% of my marketing is bandit signs sure I get nasty phone calls here and there but they work. I grossed over 550k 2013 and plan on doubling my marketing this year.

    So for those of you worried about littering the streets just know that I helped rehab over 70 homes last year and that helps me sleep at night. Not at all worried about illegal obnoxious signs on the side of the street.

    It just baffles my mind to here people talk bad about signs and you ask them well why don’t you like them have you tried them before? And come to find out they did like 100 signs and had very little response. You need massive action for massive results lol. Name of the game.

    • Hey Chris,
      Awesome response about bandit signs!!

      You mentioned you put up 2000 signs a month and its 90% of your business? Are you hiring someone to put out the signs? Also, do you just use the generic “We Buy Houses” sign?
      Thanks again, glad to hear investors are crushing it with signs!

      Tara Brown
      Davenport, Iowa

  17. After reading all these posts I can’t help but wonder why you would care so much about Bandit Signs. I drive neighborhoods every day and see signs of all kinds littering the streets. Legal or not, there are signs everywhere. I don’t see any difference in how much businesses, politicians or homeowners with yard sale signs pay, its all litter.

    So with that said, why would you pick on the real estate investor who is trying to make a living for his/her family. I’m sure there is not one person on this site that hasn’t posted a yard sale sign at some point in there life. Get over it, and stop trying to make people fell bad about making a living. Personally I think cities would do better by selling a permit to people to post signs, heck they would at least recover some of the cost of cleanup. It’s like the war on drugs, we spend billions on that program but everyone knows it does nothing but provide DEA offices with financial employment.
    So, post your signs and feed your families, and if you come up with a way to do it differently without signs then do that or not.

  18. I drove a truck for many years, and saw these signs in every city in every state. Corners are littered with them, and it was very unslightly. The political ones are terrible as well, but for the most part those were taken down after elections. I also hate seeing the hand written signs stapled onto light posts, how those can generate any business I will never know. While I enjoyed my time as a trucker and saw some beautiful site, it was always sad to see the trash signs posted about.

  19. I called one of the numbers on these signs once and they only offered me about 60% of what my house was worth. So I listed it on the MLS instead. Why do people let their houses go for so much less than they could get with a regular sale? I am not judging anyone, I am really trying to understand the seller’s reasoning.

    • Bruce Olsen

      Susie, if you can sell your place on the MLS for more money, that’s what you should do.

      The investor you called likely targets properties in need of major repair (meaning they’re essentially unsellable on the MLS). He’s also looking for properties owned by people who don’t want them (heirs) or can’t keep them (due to the 5 Ds*), because these people often own rundown properties.

      If you’re curious, contact a local investor and ask to visit a recent buy. I’d happily take you to my next rehab in all of its, umm, glory. You’ll understand why we can’t pay more than 60 %** (especially sight unseen).

      There’s an additional factor: flexibility.

      RE investors have considerable leeway to help the owners in ways nobody else will.

      As one example, about a year ago a colleague of mine bought a short sale that was being rented. A bank would have evicted the tenants even though they wanted to buy the home. They had some minor credit issues that prevented them from securing a conventional mortgage, so my colleague took part of their rent and used it to help repair the tenants’ credit. In about 6 months they were able to get a loan and buy the house from my colleague.

      I know of no bank that would do anything remotely similar.

      Although most deals don’t need this kind of flexibility, I’m willing to bet that anyone on BP who has been in RE for more than a year knows or has lived through a similar kind of story.

      Ultimately it’s our willingness to help solve a seller’s particular problems that many sellers appreciate, especially when the retail RE market cannot meet their needs. Sometimes it’s what needs to be done to make the deal happen, and sometimes it’s a little extra help for them just because they need it.

      * Death, Disease, Divorce, Drugs, DontGotAJob… I’ll credit Aaron Mazzrillo on that last one.

      ** If you were in the SF Bay Area you’d have been offered 70, maybe 75%. That’s our market.

  20. Michael Olson

    Fantastic article. Here in Colorado Springs I often see hand written versions of these signs and they actually motivate me. “Surely I can do better than this guy” I think to myself. I have no intentions of ever using these signs myself, even if they are legal. Not sure what you have against MMA instructors though.

  21. Kelly Arneson

    Lots of good input on here. One things for sure we do need to market & BANDIT SIGNS are effective. Here is my take on them… If you want to use them I would suggest putting them up on Friday & take them down on Sunday. Also code enforcement, or less likely, sheriff may call you & say you CANNOT put them in a certain area(s). Take those signs down & don’t put signs in those areas any more.

    However if your area (and there aren’t that many that I’m aware of, but there are some) is considered illegal to put up bandit signs & by illegal I mean you are going to get fined (sometimes HEAVILY) then do other forms of marketing. Whether it be knocking on doors, post cards, or whatever trips your trigger.

    Who knows if you follow the rules maybe code enforcement guy will buy a house from you 🙂

  22. Pingback: 25 Real Estate Marketing Ideas The Pro's Use - Fit Small Business

  23. Hey, thats my sign! Really, the sign that is posted in the picture above is mine, I just got a text message last night from someone who saw it on here and was wondering about my response rate. I actually worked pretty hard at trial and error to come up with that design. I tried everything. It was one of my best! Funny what lurks in the dark recesses of the internets. BTW, for what it is worth I think ‘bandit sign’ is form of political speech preferable to graffiti and vandalism and I agree that if it is good for pols it is only right that is be good for the plebs. Early, I learned to avoid ’tilting at windmills’ that is why I used a google number rather than my ‘normal number.

  24. When it comes to real estate and bandit signs, I believe the angle here isn’t about discrediting the industry in any way. It is to help regular people escape a nightmare they are facing in that specific time due to many dire situations.

    Aren’t people bombarded with real estate ads on the back of buses, at bus stands, on tv, on magazines, on newspapers already? Don’t get me wrong, it isn’t the ONLY way to do this business, but it should be allowed since it has proved to help people break a deal on their investment in an old fashioned way. I personally believe talking to more and more people throughout your experience will enable you to see where the market lies.

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