SREC News and Information

Insider Secrets: How to Use Direct Marketing in a Real Estate Business

 

Learn what successful real estate professionals say about the best ways to use direct marketing in a real estate business.

Whether buying or selling, the most successful pros use direct marketing in their real estate business.  The main reason why direct mail is so effective is that it lets you send your sales message directly to your customers and potential customers. Unlike many companies, you are not interested in broadcasting your message to a wide audience. You have a very specific, targeted base of current and potential customers whom you’d like to see take advantage of your services. Meaning you should be directly marketing to this specific audience.

Direct Mail Is One of the Best Strategies for Finding Properties

Why? Because it’s been shown that most motivated sellers respond very well to direct mail pieces. Even better than websites, online marketing and email campaigns. Simply put, direct mail delivers the best bang for the buck, by far. Another advantage is direct mail can be easily tracked. You know who the piece was mailed to and you know who is responding and why. You can send out 1000 or 2000 postcards and see within a few weeks what the response rate is. For example, if you send out 1000 pieces and you know that piece generates a 3% response rate, you will get around 30 calls.

Direct Mail Call to Action – Remember that in all your direct mail messages you will need to have a strong call to action. A call to action is a statement telling the customer what you want them to do. It can be something as simple as “call me now” or “Please visit our website”. These are basic marketing fundamentals. It’s important to keep in mind that you don’t want to do what the big advertisers do. Big companies have huge brand strength and they focus their advertising efforts on building their brand. Don’t try to compete with that. They have millions of dollars to spend and you don’t, so don’t even try.

Direct Mail Message: Don’t be Boring – The number one rule in your direct marketing efforts is don’t be boring. Try to set yourself apart. Try to be funny and personable. Basically try to be a real person and let your personality come through.

Consistent Leads = Consistent Deals – As long as you have a consistent stream of leads in your real estate business you’ll have consistent deals. You might consider sending out around 1-2000 letters or postcards to a targeted geographic area. Mailings of this size, if done properly, can consistently give you around $5-$10k in wholesaling income per month. This breaks down to between 1 and 3 deals that is a direct result of each mailing. And if you’re rehabbing and flipping instead of wholesaling, it can amount to a whole lot more.

Naturally each mailing will result in different returns. Some mailings will result in 3 or 4 deals and others will not result in any deals. But over time they average out to between 1 and 3 per mailing. Remember that consistency is key, so do the mailings on a regular basis to keep the leads coming in.

Establish an Incoming Call System

If you’re going to do direct mail, you should set up a voicemail system, call center, or other system that can handle your incoming calls. We don’t recommend the calls go directly to your cell phone. Experience has shown that incoming calls can be interrupting important business. You don’t want 10 or 20 phone calls coming in while you’re trying to work. At the same time, you don’t want the calls to go unanswered, so it’s important to establish some sort of system for taking the calls, before you begin the mailing.

You can try a system like “Patlive”, which is a live call center where the calls are prescreened. They ask the caller all the right questions, then that lead is sent directly to your email. You will get a lead sheet that spells out all the necessary information that you’ll need to determine if you want to pursue the deal, saving you a lot of time.

Two Important Books About Marketing

  1. Influence – The Psychology of Persuasion. This book will change your mind about the marketing world and all that world entails. It’s highly recommended reading for folks handling their own marketing.
  1. Hypnotic Writing. This is a great book if you want to start writing your own postcards and other direct mail pieces. You’ll learn about words that sell, as well as how to get a better response from your mailings. You’ll also learn about how to write business letters, and any other business related writing.

As you go about growing your real estate business, you will need to learn how to market your company in order to sustain that growth. The first thing to remember is to allow all your marketing efforts to fall under the Direct Marketing umbrella. This direct marketing approach will focus your message and laser beam on your current and prospective clients.

 

Strategic Real Estate Investing Radio: 11 Simple and FREE Offline Methods to Find Killer Real Estate Investments

In this episode of Strategic Real Estate Investing Radio, Josh Cantwell covers 11 FREE simple and powerful offline resources to help you find killer real estate investments. He will walk you through everything from referrals to attorneys and how to utilize them.

P.S. After you tune in to this free podcast, I'd really appreciate it if you could leave me a review. It'll only take you a second... and keeps me motivated to deliver the best free content I can.

Here's how you do it...

1. Open iTunes

2. Find Real Estate Investing Made Easy by SREC

3. Click the "Ratings and Reviews" tab and click "Write a Review"

Strategic Real Estate Investing Radio: 21 Simple & Powerful FREE ONLINE Methods to Find Killer Real Estate Investments

In this episode of Strategic Real Estate Investing Radio, Josh Cantwell covers 21 FREE online resources to help you find some killer real estate investments. He will walk you through how each method works.

P.S. After you tune in to this free podcast, I'd really appreciate it if you could leave me a review. It'll only take you a second... and keeps me motivated to deliver the best free content I can.

Here's how you do it...

1. Open iTunes

2. Find Real Estate Investing Made Easy by SREC

3. Click the "Ratings and Reviews" tab and click "Write a Review"

Real Estate Investing: The Automated Offer Formula – It Works Every Time!

Have you ever head this saying…..”As a real estate investor and entrepreneur you make money when you buy and REALIZE the profits when you sell or rent it out?” Yes you’ve heard it? Or no you haven’t?

Whether you have heard it before or not, there’s no more true statement in all of real estate than this. If you by properties right then you can’t miss. The purchase price dictates whether you will get approved for funding and whether a private lender will fund your real estate investment purchase. The purchase price dictates whether Strategic Freedom Funding will fund your deals.

The purchase price is everything.

 

“How can a real estate investor make sure they purchase real estate investment properties at the right price?” “How can a $40k Flips member or a Freedom Funding member be assured that their deal will qualify for funding?” Many real estate investors and members of Strategic Real Estate Coach ask us this exact question in our customer service department and chat box.

One question I often get from my students is, “How do I know what to offer on a real estate investment property?” Or they ask “How do I qualify for funding?”

I have a simple solution for you. Use the Strategic Real Estate Coach Automated Offer Formula. When making offers on properties, it’s the same equation every time. I use my Automated Offer Formula to find the max purchase price I can pay on a property and then simply try to acquire it at a price below that price.

 This formula is what I use EVERY SINGLE TIME on every, single property I bid on. The math always works out. It’s simple. If I can get the property using the formula below, I buy it and so should you. If the seller wants a higher price than this formula allows, then I would pass on it and move onto another property and so should you.

This video interview explains “Asset Based lending” and how my funding companies will fund your deals using the Automated Offer Formula.

When you use the automated offer formula you can partner with us using an equity partnership. This quick 60 second video explains what an equity partnership is using the Automated Offer Formula.

The Automated Offer Formula works like this:

  • Take the Realistic Salable After Repaired Value of the subject property. (Real estate investors can get this value from a real estate agent who can run a Current Market Analysis or a “CMA”. A CMA is a report made up of 3 sold properties that have sold and transferred in the past 3 months, 3 pending comps that are currently under contract and awaiting transfer and 3 active properties that are on the market.)
  • Multiply The Realistic Salable After Repaired Value of the subject property times 65%
  • Subtract the repairs needed. (if you need a repair estimator check our hammerpoint.com)
  • The final remaining number will give you your MAXIMUM offer price

Here’s a real life case study example, we recently bought and flipped 2227 7th St.:

We started with Step 1: The After Repaired Value.

We determined we could sell it for about $140,000.

We then moved onto Step 2: Multiplied times 65%.

Grab a calculator and do the math. $145,000 x’s 65%. That’s $94,250.

Then move to Step 3: Subtract the repairs (use www.hammerpoint.com, which is part of the Realeflow Software to determine repairs). We determined that 7th street needed $30,000 in rehab and repositioning. So finally, subtract $94,250 minus $30,000 and that leaves $64,250 as our max offer price. We bought the property for just $62,000. PERFECT! It meets the Automated Offer Formula.

It also leaves us $49,000 in gross profits to work with (the difference between $145,000 (sell price) and $92,000 (all in investment) which is a nice profit spread and ensures we will make a profit even if something goes wrong.

As most of you know, I’m in the Greater Cleveland area and we had a ROUGH winter. It was subzero degrees almost the whole month of February.

Once the weather cleared up, we were able to really hunker down and get some houses turned around very quickly and on the market.

Do you remember the case study I mentioned last week, 2227 7th St? It was the home we sold in just FOUR days for OVER the asking price. This is the perfect example of using the Automated Offer Formula.

Watch the video below for an overview of 2227 7th St. and the Automated Offer Formula broken down to see exactly how it worked for us.

Like I mentioned above, the market I’m consistently buying in is the Greater Cleveland area, but if you live in a hotter market like somewhere in California, Vegas or Seattle, I can show you how to adjust the formula to fit your needs. Simply multiply times 70% instead of 65%. In those hotter markets prices are also much higher so there’s a larger profit spread. So instead of 65% multiply times 70%

Follow this link to my 40K Flips blog and watch the Automated Offer Video Training I did.

Have you used my Automated Offer Formula? If not, start today. Go make an offer on a house using this formula. If so, how has it worked out for you? Leave your own case studies in the comments below.

We’ve seen many, many of our subscribers and members use the Automated Offer Formula and have great success with it and close very profitable real estate deals.

The case study from Mark Pepe showcases how he used the Automated Offer Formula, bought a house in the Seattle market and flipped it quickly. He’s just one of our thousands of successful members.

Be Daring,

Josh

P.S. Not a Strategic Real Estate Coach Member, yet? Searching for more tips and strategies to super charge your real estate investing? Go below and subscribe to our newsletter and download our 2 free ebooks. “How to Find Your Real Estate Investments” and “How to Fund Your Real Estate Investments”

 

The 411 on HUD Homes

Government foreclosures, aka HUD homes, is an important topic for real estate investors to be aware of. You may automatically think the houses need a ton of work or maybe you didn’t even know that you could get hold of these properties.

Let me walk you through exactly where these HUD homes come from:

Many of them are in great condition and need little to no work. There are many advantages to purchasing a HUD home – one being that they are usually winterized, cleaned out, properly secured and checked on regularly since they are owned by the government.

And the best news is – anyone can buy them! In the first 15 days, the homes are only available to owner-occupants. After that, anyone can bid! You will just need to work with a licensed real estate agent who has a valid NAID number.

I personally purchase about 8-12 HUD homes a year. I prefer to do big profit deals where we buy, fix and sell, but wholesaling can get you a quick profit also.

Now let’s take a look at a personal case study of mine, 242 Sandstone Ridge Way. It’s a HUD home I acquired for only $131,000 in a neighborhood where other homes are selling for around $210,00! It needed little to no interior work, we added a deck, new landscaping, new windows, new furnace and upgraded the kitchen appliances.

Check it out:

Now you’re asking, “Josh, where are you finding these homes?” Let me tell you about HudHomeStore.com. This is where all these homes are listed and like I mentioned before, after 15 days on the market, they are open to anyone!

When looking at HUD properties, make sure to pay attention to how long the home has been vacant and take into consideration the problems that the home might have acquired over that time. Homes built prior to 1978 may contain lead paint, so make sure to pay attention to that. Other items to think about are asbestos content, buried storage tanks and other environmental hazards.

Keep in mind though, that HUD does not warrant the condition of its properties and will not pay for the correction of defects or repairs. Since the new owner (you) will be responsible for making needed repairs, HUD strongly urges every potential homebuyer to get an inspection from a licensed professional home inspector prior to submitting an offer to purchase.

Once you choose a property you want to bid on, fill out all information and have your agent enter their NAID number, you will receive a confirmation number in an e-mail. You’ll see a long number then -08 or -21, that number represents how many bids are currently out on the property. If there are a lot of previous bids, keep in mind you might be able to wholesale is back to another interested buyer for a quick profit.

I would suggest setting up a separate Gmail account just for your HUD home bids so you can see all the confirmation numbers, counter offers, etc. When they counter you, that number will be what they want their NET proceeds to be, NOT the gross purchase price. You have to add back in your closing costs and real estate agent commissions. Once you receive the offer you must determine if you want the property or not.

You will get a follow-up email once your offer is accepted with the HUD purchase and sales agreement, so you must fill that out and submit your earnest money. This is a 48 hour window that you can run comps on the house and make sure you really want to invest. If you decide you do NOT want to move forward with the property, just don’t send back the agreement and earnest money.

If you do want the property, send your agreement and money via UPS overnight because they will get it there by 10am the next day. Once you’ve secured the property, decide your exit strategy. Do you want to rehab it, keep it as a rental or wholesale the property? The choice is yours to decide how to move forward.

Tune in to my episode of Strategic Real Estate Investing Radio this week to see learn the exact strategy I use to find HUD homes on HudHomeStore.

HUD Facts to Know:

  • HUD does everything by case number, not by property address
  • If a property is bid on and doesn’t close, it comes back to the market for 5 days for owner occupants then they do a new appraisal
  • Earnest money is between $500-$2,000 – usually 1% of your purchase price
  • HUD often lowers their asking price by $10,000 or by 5% of the purchase price
  • They reduce their asking prices after the house has been on the market for 90 days, 115 days and 135 days

Stay tuned next week for information on a FREE class that my buddy, John Cochran, the “HUD Stud” and I are hosting on HUD to learn more about how to turn buying these properties into an automated process that rakes in the profits.