More and more these days, the question of what to do next is coming up form both brand new investors and experienced investors who have never had to dig for their business. A buyer’s list has always been a foreign concept to buy & hold investors or fix n flip investors. Many of these investors are surveying the changing landscape of real estate investing and taking note of the challenges to their business. They are deciding it is a good time to add other revenue streams to their businesses and wholesaling has always been touted as the easiest avenue to build quick income. Whether they are experienced or not, many are finding that simply “building a buyer’s list” is neither an answer to all of their problems nor an easy step to building additional income. They quickly realize that there is a lot more work to do!
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
What Is A Buyer’s List
As I write this, I want to make sure that my advice on what to do with a buyer’s list is mixed with a few assumptions that need to be thrown out the window before they make an ass out of . . . well, an ass out of whoever is to blame for these silly assumptions.
There are probably more than a few people who will tell you that purchasing a list of buyers from list companies is a good idea. I am not one of them. Most propagating this theory are the ones selling the list! Buying a list of names, numbers, addresses, emails, and whatever else is included, is never going to be the long-term answer that real estate professionals are looking for. It may provide a short-term “feel good” because you are actively marketing to a group, but this is not a high-quality solution. This is nothing more than taking action for the sake of feeling like you are doing something. In my experience, these lists are littered with inaccuracies and either no scrubbing has taken place or the lists were scrubbed long ago and continue to be recycled.
What do I mean by no scrubbing and recycled? Lists have to be constantly updated. And by constantly, I mean every mailing and at every contact! Regardless if you build your own list or you make the mistake of purchasing one, lists have to be scrubbed to remove duplicates, inaccuracies and non-deliverables. Otherwise, those using the list are wasting time, money and energy trying to reach contacts on the list that are unreachable or who don’t care. Even worse than lists that are not scrubbed are lists that are recycled.
List sellers make money by selling a list over and over — and then they sell them some more — and then they sell them again. Get the point? You are probably not the first one to be contacting someone on that list. In fact, there is a high probability that the names on that list, that are reachable, are being hammered with multiple offerings across multiple industries, and very well could be getting buried by letters, postcards, magazines and every other mail piece being generated.
In the end, the whole reason to not buy a list, even when you are looking to grow your existing list, is that the people you are communicating with need to be treated like gold!
Once they are identified as interested buyers, you want to make sure you are offering value and opportunity. You do not want to mix messages and worry about finding more buyers. Treat the one you have right and you will never worry about growing again.
How To Treat Your Buyer’s List: Provide Value!
I am a huge believer in education. There is a clever term that has been coined and it is “education marketing.” It has been around as a concept for many years and I find that it is absolutely the best way to create real value to your buyer’s list. Some of the best ways to provide education marketing are to think about the things that are important to those people on your buyer’s list. Many times, real estate investors are looking for good value properties and simply do not have the time to find them on their own. So they turn to whom ever is going to build a relationship with them based on likeability and trust. The best way to do that is by providing something of value.
Many times, real estate professionals believe that the property opportunities are the only value they are providing. That is not only not true, it is a sure fire way to have to constantly build your list because buyers will not come back for more. If you start by providing valuable information that your list is interested in, then when you do provide valuable property opportunities, the buyers will always come back for more, based on the relationship you have built.
Education marketing is a great way to provide value and some easy ideas revolve around your market, the economy and lending topics. You can start by keeping a blog online and writing on topics that are pertinent to your market – the good and the bad – as well as topics about the local economy. There are great economic topics to write about such as new jobs coming, home price changes or the ebb and flow of foreclosures in the area. When you write about these topics in your blog, send the articles to your list. When your buyer’s list sees that every email coming across is not titled “Hottest Deal You Have Ever Seen,” they will be more responsive to every email and will look forward to your emails. You are providing quick views on topics that affect them as a real estate investor and that is valuable.
Another great idea for treating your list like gold is to take time to survey the list and identify why they are on the list and gauge their interest in your product. Buyer’s reasons for losing interest can vary, but you definitely want to know who is interested in what, and for what reasons. Another great reason for surveying your list is to identify trends and groups within the list itself. There may be single-family home investors, multi-family investors, or even commercial investors. If you are able to provide for each of them then you have an incredibly diverse list you can target specifically. Most of us are not able to do that. Instead, if you have multiple different groups of buyers and are not able to provide to each of them, this gives you a chance to provide value to your list by partnering with a local provider. Instead of losing the interest of part of your list, you are able to provide what they are looking for because you took time to identify what they were looking for.
Lastly, you should absolutely thank your list. This is the easiest thing you can do, and takes no time at all, but it may have the biggest impact. Saying thank you in an email is easy and is a must, but you can have a much greater impact if you are able to mail a thank you. A quick card to say thank you for reviewing your properties, reading your blog, opening your emails and for purchasing properties, will go a long way toward building a consistent performing list. They will be engaged and responsive.
A Gold Mine That Keeps Giving
There are way too many misconceptions about building a maintaining a buyer’s list to go into in one article. However, there are two things that every reader should take to heart about a buyer’s list. They are your lifelines. There is nothing more important to the future of your business than the respect you show to a group of people who have shown interest in you, and who have purchased properties from you. A solid, performing list of buyers can and will purchase multiple properties over an extended period of time, and each buyer is worth much more than one property. They are worth MANY, MANY purchases over the years and a happy buyer is a great referral prospect.
The misconception that the size of your list denotes your importance and is a sign of success is just plain false. Neither idea could be further from the truth. I have a relatively small ‘possible buyers’ list. I have made the mistake of purchasing lists in the past and quickly got rid of them. I don’t need someone else to tell me that this group of people with over $250,000 is a good list to mail to. In my experience, they are not! I have a small group of people that we communicate with and we have astonishing open and click thru rates.
What that means is this: When I send out a communication to my list, which is made up of people who have and many who have not bought, on average 42% of the recipients open and look at the email. I constantly provide them with links to articles and blogs that I have written and 37% of those who open the emails click on the links and go through to my blog or articles.
Both of those percentages are well over double the industry average and that is a direct result of providing great value first and great valuable properties second. Follow those simple ideas and your list will provide you gold for a long time.
Photo: Sean McGrath