Week 9: Direct marketing
Direct marketing is another option to get great deals on houses. I do some direct marketing myself and I have bought a flip from my direct marketing and listed many properties as an agent. Direct marketing is no easy task to implement. It takes time, money and systems to run a direct marketing campaign well. That doesn’t mean you cannot use some direct marketing techniques sparingly and see results. But, do not expect to spend a few hours every month sending out letters and have multiple deals fall into your lap.
Goals for this module:
- Learn the basics of direct marketing
- Learn how to drive for dollars
- Learn how to use bandit signs
- Learn how to set up a direct mail campaign
- Learn how to talk to sellers
- Learn how to use wholesaler to do the marketing for you!
1. What is driving for dollars?
Driving for dollars is the easiest way to buy off market properties,. It takes the least amount of money and anyone can do it.
task for this section:
- Start taking notes on your phone or somewhere in your car where you can write down the addresses of vacant or run down houses you see.
- Create a letter that you will send to the owners of these homes expressing your interest to buy.
2. Bandit Signs
Bandit signs are another way to attract off market sellers. I do not use bandit signs myself, because I can’t do everything! There are also some questions on if I have to disclose that I am an agent on the sign. You also have to make sure bandit signs are legal in your area. I have heard mixed reviews about the success of using bandit signs.
3. Direct mail
Direct mail is the most effective marketing for motivated sellers. It takes work to put together a successful campaign. I have bought and listed properties with our direct mail campaign.
Direct mail is not an easy way to find great deals. It takes time and money to put together a great campaign. Here are some great articles on the subject.
I would not go full boar into a direct mail campaign until you have learned how to use the MLS and some other ways to find great deals. It takes time to create a campaign and take the calls and it could take too much time away from other activities if you do not have everything dialed in.
Task for this module:
- Talk to Yellowletters.com and see what they charge for doing a campaign for you. It helps to get an idea of the cost if you decide to go this route.
Sometimes you get lucky and someone you know happens to know of some sellers who need to get rid of a home. Maybe it is your lawyer, your accountant, another real estate agent, a lender or anyone in your network. It never hurts to tell people that you are a real estate investor and buy a lot of houses. I have had other agents come to me with deals because they know I buy many houses that need a lot of work. I have also built a great reputation as someone who will close on deals and when I say I will do something I do it. I don’t nickel and dime people and I do not renegotiate deals after I say I will pay a certain price, unless something new is discovered that is a big problem.
5. Using wholesalers to find off market properties
In most areas of the country there will be wholesalers who are using direct marketing to find off market sellers. The wholesalers use letters or postcards to find the sellers and then the wholesalers sell those deals to investors like me and you. The quality of wholesalers vary greatly from one to the next. I would estimate there are ten bad wholesalers or wannabe wholesalers for every good wholesaler. Wholesaling is taught as the easiest and cheapest way to invest in real estate and many people jump into it without a clue as to what they are doing. Just because someone says they are a wholesaler does not mean they have great deals or even know what a great deal is. Make sure you verify all of their information and do not trust them to complete everything exactly as it should be done. Have your attorney or title company verify what they are doing and their paperwork.
Tasks for this section:
- Search for wholesalers in your area using Google
- Attend local real estate investor meetings to meet new wholesalers
- If you are not an agent, ask your agent if they know of any wholesalers or get emails from wholesalers
- If you get postcards from people looking to buy houses, do not throw them away! Contact those people and see if they wholesale
- Call any bandit signs or billboards you see, craigslist ads or anything that looks like it might be a potential wholesaler.