One of the most common problems I hear about from real estate investors is trouble with marketing and finding leads. They want to know where the good deals are, and how they can get them. They ask what they could be doing differently, because what they are doing now just isn't working, it's not consistent. Leads, and as a result deals, are inconsistent – on a sort of rollercoaster cycle. The answer is simple, and I tell them so – referrals.
SREC students all across the country have a completely full lead pipeline for all types of real estate investments. They keep it full without spending any money on marketing. They’ve created a network of solid sources in their area who regularly provide them with new opportunities, for free.
Before you set out on your quest to create your own network, do this: figure out a referral system for other professionals and everyday people who send leads your way. Professional referrals may cost you anywhere from $200-$2,000. For individuals, it's a little different. A Gift Referral Incentive Program (GRIP) is a way to show your appreciation to someone for sending an opportunity your way. These referral fees help build goodwill and virtually guarantee that more will be coming your way in the future.
So, who should you target for your referral network? Remember, this won’t cost you anything but your time, and that investment could pay off in spades!
- Attorneys – Your best bet lies with (but not solely on) bankruptcy and divorce attorneys who can and do accept referral fees. Divorce attorneys may have clients who are each demanding that the other pay the mortgage, so nobody does and the property goes into foreclosure. This group deals with people who are in financial trouble and know that if a files for bankruptcy protection, one way to get the foreclosure removed from their record is to sell their house, and that's where you come in.
- Mortgage Brokers – Ironically, mortgage brokers might be the ones resaponsible for putting people in a position where they face foreclosure by making it possible to own a home they can't afford. Now they want to try and make it right for these clients. Propose a direct marketing campaign to promote both of your services. In this case, the broker should be the one footing the billl for the campaign. Then, when your short sale deal closes, don't forget to pay that referral fee so you're top of mind next time.
- Title Companies – If you can inform local title companies of the services you provide and you're willing to send them business, they will reciprocate with leads that came from failed refinancings. Real estate professionals often make up the title company staff, so if they know about you and what you do, your lead generation machine will keep turning!
- Contractors – In today's housing market, contractors are looking for ways to keep their businesses going. What better way then by having him or her act as your lookout, or “bird dog” for leads. This group is, naturally, surrounded by real estate professionals. If they hear something or talk to someone who might benefit from your services, make sure that you're top of mind with them. Remind them that there is a referral fee involved to keep that relationship healthy and thriving.
- Friends and Family – Always have a supply of your GRIP flyers on hand, ready to give out. Telling them a little about what you do, and handing out a business card will go a long way. Make sure not to get too complicated, just give the top-line highlights. You may be surprised when your name might come up in conversation!
- Fellow Investors – Many rehab investors don’t know what to do when they come acress a house that is about to go into foreclosure. They focus on their specialty and don't have the diversity to handle this situation. Mention your referral fee and how, by banding together, you can conquer any type of investment. Of course, that will include a finder's fee, generally in the range of $1,000 to $2,000. This will help expand your circle of influence and bring in even more opportunities in the future.
- Happy Homeowners – Happy homeowners will tell their friends about the person who helped them out of a tricky situation. That's you! That's when you should strike and ask for a referral and perhaps even a quote that you can use in your marketing. It doesn't hurt to ask, and chances are they will be more than thrilled to return the favor.
Following some of these simple strategies can mean the difference between riding that rollercoaster of leads and being on a constant high. For more details on building your referral network and letting them be your marketing team, register to become a Real Estate Rebel today.