Real estate marketing strategy maybe a new thing for you. But it’s very important for real estate investors and you have to know some real estate marketing strategy if you want to be successful in real estate investing.
In my long years as an investor, there’s one major thing that stops most newbies from flipping their first home…
It’s not the funding…
It’s not even the rehab…
It’s finding that first deal.
In other words: marketing!
There are paid strategies, free strategies, easy ones, and hard ones. Which one is right for you? Let’s talk about them and see what’s right!
Real Estate Marketing Basics
Okay, so a little primer about what we’re looking for in a real estate investing deal
Motivation
What you as the investor are going to be looking for is to find motivated sellers. So let me start by saying you are not going to be finding deals on the MLS. I hate when newbie investors start looking on the MLS, or Zillow, or Realtor. You are never going to find a deal there!
Here’s why:
The people that put their deals on the MLS are there because they have a real estate agent advising them and the house is ready to move into. Now, if someone were to post a property that could be fixed up for significant profit, roughly a thousand other investors will be swooping down on that deal before you can even blink.
Pros often have software to find these things, or maybe they have cash ready to go, or whatever the case may be…you have no chance.
So instead of looking on the MLS, you’re going to look for people who’s house isn’t for sale, but they’re going through something in their life that might make them motivated to sell!
For example:
- Divorce
- Foreclosure
- Inherited the property
- Need to move into a nursing home
And really, there are tons of reasons people want to sell their house fast, even if they’re leaving money on the table.
Equity
Real estate investors market to people with equity in their property. As a quick reminder, equity is the difference between what the owner owes on their home and what the home is worth. If they owe $300k, and the home is worth $400k, then they have $100k in equity.
This is huge for an investor. Let’s say someone owes $200k on their house…they are extremely unlikely to accept an offer from you for $180k. Not only would they still be on the hook for $20k on a property they don’t even own anymore, but there are lots of other costs associated with selling the home, like hiring an agent.
It’s so unlikely that will work out that I look for people with $100k in equity. If someone is going to lose money on the deal, I won’t even make an offer. They’re not going to accept it, and even if they did, I’d feel bad about. Real estate investing, for me, should always be a win/win. I’m not out to take advantage. I want to find a solution for someone in a bind who needs to move on from their property. They get some cash and get out of the property, I get a deal to fix & flip for profit.
Discounted Price
So the first two (motivation & equity) lead to this one. If you can’t get a discount on the market value of the property, then you’re not going to turn a profit…simple as that.
So why would someone knowingly sell a property at a discount?
Because they’re motivated and they have equity!
Let’s put this all together in a quick example.
Let’s say that a 90-year-old man passes away. He has two sons, both of whom live out of state. They come in town to take care of his affairs, but they don’t want to stick around forever.
They both inherit his home, but as is common among older people who’ve lived somewhere for a long time, it’s massively in need of repairs.
These two sons just want to sell the property and split their inheritance. Luckily, their dad owned the property free and clear (it’s all paid off!).
So they talk to a real estate agent. The agent tells them that no potential buyer will be able to get a conventional loan to buy the house because it’s not up to code. It will cost them $10k to get the house up to code, but it will still be run down. Maybe they can sell it for $200k after fixing the code issues.
However, they see other properties in the area selling for $320k.
The problem is that these are nice, fixed up homes, right? They could get their father’s house in that kind of shape, but they’re not fix & flippers. They just want to go home with their money.
So along comes Mr. Real Estate Investor. He offers them $200k for the property, which is a fairly good deal considering the shape it’s in. The two sons are more than happy to get this problem off their hands and walk away with $100k each.
Now Mr. Real Estate Investor turns around and gets a loan for $224k (which is 70% of the after repair value—a pretty standard number).
So he buys the property for $200k. Perhaps he can fix it up for $35k, and then he’s got another $15k in loan and other costs. That’s $250k in total costs for the deal.
So he brings $26k to the closing table ($224k + $26k of his money covers all the costs).
He fixes it up, and sells it for $320k. He pays of the loan, the interest, and recoups his $26k…and he walks away with an additional $50,000 in profit!
That’s the point of marketing for real estate investors—to find those types of deals with that type of profit.
So let’s talk about some specific marketing tactics.
Examples of Real Estate Marketing Strategies
Direct Mail
Let’s start with my ALL-TIME favorite strategy. I love this one so much…in fact, when other investors send me their mail (because I own rental properties), I keep the postcard! Not because I’m going to sell my properties to them…but because I’m a marketing junkie when it comes to real estate investing.
Why do I like this one?
- It’s simple – you’re going to find a template, put your info on it, and mail it out to motivated sellers!
- It’s fast – this isn’t a slow-burn strategy…you send these things out and you’ll have responses coming in
- It’s relatively cheap – Sure, it’s not a free strategy, but they’re still only $0.60 a pop or so.
- It’s predictable – it’s all a numbers game. You send out X postcards, you know you’ll get a certain number of responses, and that will turn into a certain number of appointments, some of those into offers, and some of those into deals. When you do it a few times, you’ll get a sense for what these numbers are. At that point, you’re not really spending money if you know there’s a deal or two to be had. I’m not going to tell you what my numbers are because that would be irrelevant to you. I’ve been doing this a long time, and your skills (with making your list and closing the sale) will certainly improve over time…mine have for sure.
So, the next question is…who are you mailing these too?
You’ll first want to figure out what types of potentially motivated sellers you want to send to… for example:
- For Rent By Owner – Landlords are always getting tired of the properties they own
- Vacant Properties – There’s a reason it’s vacant…and it might be they just want to get rid of it
- Foreclosure – Someone’s in a bind and you can help them out
- Involuntary Liens – See Foreclosure.
Now, you need to get a list of these people…but how do you do that? There are few different ways real estate investors gather lists to market to:
- Buy one – you can go to a site like Need To Sell My House Fast and buy lists of motivated sellers, but that’s not cheap
- Put It Together Manually – You can look through public records at the County Recorder’s Office to find people who are going through a foreclosure, for example.
- Use a Software – this is becoming the option of choice these days. That’s because if you do things by hand, you’ll often take too long to find the information when so many other investors have software. That’s why I give my members a software that can sort through 160 million properties and send out postcards in less than 10 minutes. It’s the only way to compete these days.
Driving For Dollars!
There are a couple of principles that good real estate marketers understand.
The first is that you have to spend either time or money. If you don’t have a lot of time, the only way to gets leads is money. If you don’t have any money, then you’re going to have to spend time.
The second principle is that to truly be successful, you’ve got to do things that others aren’t willing to do. If real estate investing were super easy to learn and none of the strategies were uncomfortable or expensive, then wouldn’t everyone do it?
Driving for dollars is a perfect beginner strategy, because it’s free and it’s relatively easy to drive through neighborhoods and find abandoned or For Rent properties.
It’s the cold calling and the door-knocking that really hold people up. So let’s talk about those.
Cold Calling
When I first started out, I actually used two phones at the same time! While I one phone was ringing, I was starting to dial the other. Since not many people pick up, it tended to work out pretty well. But I was driven. I was willing to do what others weren’t. That’s maybe my biggest “secret” to success.
There are lots of ways to use cold calling. Like the example above…if you find a property that looks like a great candidate, you can then take the address, run a skip trace (they’re cheap), and get a phone number to call!
Also, one thing I teach new investors is to never, ever drive past a For Sale By Owner or For Rent sign without calling! Those are some of the low-hanging fruit with real estate marketing. And those usually have phone numbers right there on the sign. The FSBO seller might be having a hard time selling his property, or just getting annoyed with the process. The For Rent owner might be tired of finding new tenants or keeping up with that property. Always ask if they have other properties they’re interested in selling as well. Owners of rentals often own many properties, and they’re often buying and selling.
Door Knocking
Really? Door knocking? But it’s so old school!
Yes it is…and it works really well.
Of course it’s not my main strategy (just like driving for dollars and cold calling isn’t anymore), but I used to rely on those strategies heavily in the early days when I was a little more concerned about the money I was spending.
Plus, just diving in and doing these things gives you repetitions, which is the only way to get better really fast at this.
I like to do what I call a “5-around.”
When I see a property that might be interesting to me as an investor, such as an obviously vacant property, then I’ll first knock on that door. Then, I’ll knock the house on either side of that one, and then the three directly across. I’ll ask them if they know the owner and that I’m interested in buying that house. Often, at least one of them will have contact info for the owner and will share it with you.
Bandit Signs
You know those little signs that get posted on busy traffic corners that say things like “Work From Home, Make $20k Per Month”? Those are bandit signs!
It might seem like a cheap little strategy employed by the desperate, but I’ve used them successfully, and I know BIG-TIME investors that use that as one of their main tactics! Of course at that level, they’re hiring high school kids to put them out, but you can do it for yourself at first.
It’s pretty simple. You’re going to go to buildasign.com and get the yellow corrugated plastic signs. I prefer the 24″ x 18″ and all I say on them is something like “We Buy Houses” with a phone number (I’d use a Google Voice number so you can always disconnect the number from your personal phone).
Then, you’re going to put up 25 signs in a 5-mile area. You want to find places that are busy, or are frequented by people who might need a little help. For example:
- Pawn shops
- Pay-day loans
- Walmart
- Major intersections
- Busy weekend events
Then periodically go back to make sure that your signs are still there! Of course you should make sure that your city allows you to post bandit signs first.
Wear a Shirt
Oh the beauty and the simplicity of this one!
Seriously, this is the most passive one on the list, but can be really fun! It sparks up all sorts of conversations with people. For example, let’s say you’re going to the dentist and you know they’re going to make small talk. A shirt that says “I Buy Houses” or “Sell Me Your House” are sure to provide them a topic of conversation.
Then you can tell them about what you do! Even if they don’t have a property for you, they may be someone who’d love to partner with you at some point in the future.
Ringless Voicemail
This gem of a marketing strategy for real estate agents is a pretty simple one! A ringless voicemail is when you use a service to call people on your list, but instead of ringing their phone, it just leaves them a voicemail!
These are nice because it’s less intrusive, so it starts off as less annoying for the lead. They’re going to get a little notification that a voicemail was left…and if you’re anything like me you can’t leave a notification unread on your phone! I get those little numbers in the corner of the icon and I just have to go take care of it.
You’re just going to record something along the lines of “I Buy Houses” but a little stretched out. For example:
“Hi, my name’s Ryan and I see that you own some rental properties. I’m an investor who pays cash for houses. If you have any properties you’re interested in offloading, give me a call at 555-5555.”
Keep it short, simple, and get to the point. Tell them who you are up front—no need to be tricky about it.
Facebook Ads
I consider this a more advanced strategy for sure, and it’s a big topic! However, those who do it right can do REALLY well!
If you’re unfamiliar with the finer points of Facebook ads, the coolest part about them is how targeted you can be in your advertising.
Facebook users (for better or worse) often put a lot of information about themselves on the platform. Facebook also tracks the things you click on or watch. Marketers can even “pixel” you so that after you visit their site, you’ll see their ads on Facebook!
The point is, it’s a marketer’s dream! You can easily target people who are real estate agents, other real estate investors, landlords, property owners, have purchased properties, and more. Seriously…almost anything you can think of.
Then it’s time to consider what you’d like to do with your ad. You can do things like:
- The ol’ trusty “I buy houses” kind of message
- Find real estate investing partners. “I’m looking to partner up with someone in your area…”
- Find cash buyers. This one is especially for wholesaling. The key to wholesaling is having a list of people willing to buy the property off you at a moment’s notice. You can start building that list with Facebook.
There are probably thousands of courses online about Facebook ads because they can be a bit complicated. I’m not going to dive any deeper, but if you have some money and want results fast, it’s certainly a strategy to look into!
Create a Website
If you’re not tech savvy at all…bear with me. These days a simple site is insanely easy to put together!
You don’t need a site to do a whole bunch of stuff for you. The main purpose is that if someone looks you up, they can read a few paragraphs about you and how you can help. And more than that, they just want to know that you’re legit. A website goes a long way in establishing credibility.
There are a few options here…
- Hire someone to set up a site – Head on over to Upwork and hire someone to set up a simple WordPress install. With your simple needs (maybe an About Me page and a home page, to start), you can get this done for no more than a few hundred bucks.
- Use a service – Use programs like WordPress.com or Wix.com and they’ll do the heavy lifting for you. You just pick a design you like, add some colors, throw up your phone number, a snazzy headshot, and a little bit about you. Good to go!
- Set it up yourself – so this definitely is a bit more techie, but it’s still not too bad. You’ll need hosting, a domain name, and then you’ll want to install WordPress on your new site (that’s different than WordPress.com). There are definite advantages to having your own domain name and hosting…but I won’t bore you with the details here. I’d Google how to set up your own site with WordPress, and you’ll be overloaded with tutorials and great info.
Pro tip: I wouldn’t even worry about a logo at first. I would take the name of your business, or just your name, and find a nice font and color that matches the color scheme of the site. That’s more than good enough to start.
While this won’t necessarily be a lead-generating website by itself, it can definitely support and uplift all your other marketing strategies! If they see a bandit sign, a postcard, or a Facebook ad, in this day and age your potential seller will likely want to find out more about you online.
Bird Dog
So this isn’t a fix & flip strategy, but it’s a great way to earn some money when you’re just starting out. It’s like wholesaling, but even more stripped down that that!
A bird dog goes out and finds a great deal with profit potential. Then they just pass on the lead to another real estate investor. No offer, no contract, nothing. It’s that simple.
One key here is that you should work with investors you trust. Unscrupulous investors might take your lead and go get the property without paying you a finder’s fee!
A bird dog can typically make $500-$1,000 per deal passed along, or some investors will even pay 10%. On a very good deal, that could be a lot. (I recently had a borrower turn in a $75,000 profit on a fix & flip. 10% of that is nice for doing relatively little.)
Conclusion
So there you go! Those are some of my favorite examples of real estate marketing strategies!
Just keep in mind:
Using only broad strategies—like wearing t-shirts or using bandit signs—that aren’t very targeted shouldn’t be your main way to market. There’s no predictability in finding deals, so you should use them as supplemental strategies.
I prefer my main strategies to take the “sniper” approach. You narrow down to specific types of people you want to target and then send them a postcard, give them a call, or knock on the door. Those ones are more predictable and will likely be your main source of leads going forward.
Learn how you can make money flipping properties with us by attending our next webinar.
COMMENTS