Having been involved in real estate investing for little while now, I've become very familiar with various marketing strategies. And along the way, I also found out which methods generated leads, and which ones didn't.
One thing to note is that everyone will experience different results with their respective marketing campaign. Two different people in the same market could be doing the same exact thing and get very different results.
And two different individuals, in two different markets can get similar results. That's just the nature of the beast.
But there is a secret to this; there is no secret! You have to test each strategy in your particular market to find out which one works for you. And when I say test, I mean test.
For example, don't send out 5,000 letters to a mailing list that you've never tried. That defies all common sense. In that example, I would send out 200 letters and see what the results are before diving in headfirst.
I recommend that you apply this methodology across all the strategies below until you find the one that works the best for you.
So, in my opinion, the following are the top 5 real estate marketing strategies (in order of effectiveness and quality of leads):
1. Apparel/Human Advertising
2. Direct Mail
3. Cold Calling
4. Bandit Signs
5. Newspaper/Yellow Page Ads
Apparel/Human Advertising
This is my favorite way to generate leads. Why? Simple. Because leads come to me, instead of me chasing them. Let me first explain what "apparel/human advertising" is. I define it as "wearing your business," meaning that you display and promote your services on your apparel and clothing.
I simply put on a shirt that markets my services whenever I go out -- to the mall, grocery store, post office, doctor's office, etc. -- and people come up to me to talk about real estate and their specific situation. It will surprise you how many people will approach you.
And the quality of leads is also high. You know why? Because people instantly and clearly know that you are a real estate investor and will only approach you if they are serious.
For example, I wore my "Private Lender" t-shirt the last time I visited my doctor. Once he read my shirt, he couldn't stop talking about real estate and how he has been looking for places to invest his money. Bingo, now he has the answer, and I secured another private lender to my stable.
And guess what? He has other friends who are doctors, dentists, and lawyers who have money to invest. Now you can see why I like this strategy so much.
- Most inexpensive method
- Instant, direct way of telling people what you do; face to face contact
- Only works if you wear the apparel
- Only works where you are
Direct Mail
There are several ways to employ a direct mail campaign. I've attended several seminars run by real estate "gurus," and each guru will swear by their own program. So, being the pragmatist that I am, I tried a majority of them.
I've ran marketing campaigns using postcards, handwritten letters, professional letters, and even USPS priority mail. Out of all the campaigns, handwritten letters generated the most leads.
On a good campaign, I received 25% response, which is astronomical. Don't expect this high of a response rate every time. My average response rate hovers around 10%.
- Direct mail isn't cheap. It is the most expensive strategy.
- You must choose your mailing list wisely and get it from a credible source
- Depending on the list, you will receive letters that could not be delivered
- Most homeowners will respond only after multiple mailings (experts say 7 contacts is the magic number).
Cold Calling
How many people can truly say that cold calling strangers is something that excites them? Probably not many, because most people inherently avoid unfamiliar territory. It's time to get past that fear and get out of that mindset, because cold calling is by far one of the most effective strategies out there, especially if you are going after the preforeclosure market.
First, you need to get a list of individuals to call. If you are marketing to preforeclosures, there are several services that will provide phone numbers of homeowners facing foreclosure. Second, you need to practice your call script. Know what you want to say and how to respond to objections. And practice this over and over until it is second nature--and then practice once more. You get the point.
Being able to respond intelligently to the homeowner's concerns will build credibility and rapport. Those are the two most important things to construct during a cold call. Remember, you are a stranger who they know nothing about.
Thirdly, be able to prescreen each caller efficiently and effectively. Gain a true understanding of their situation, and obtain enough information to analyze the property to see if it fits your criteria. And finally, if the property meets your criteria, be able to close, whether it means getting an appointment to view the property or actually agree to sales terms.
- Very effective -- when you get in contact with homeowner
- Targeted to only those you want to market to
- Easy way to build rapport with homeowner due to personal contact
- Calling strangers asking to buy their house is not on the top of most people's list
- Can be time consuming and can only market to people you actually talk to
Bandit Signs
If you're not familiar, bandit signs are those PVC signs you might see plastered around town, reading "I Buy Houses, Any Condition, Any Price." They are usually attached to wooden posts near busy intersections.
Before you go putting these signs up, check with your city's rules and regulations because bandit signs are illegal in many cities. You can be fined heavily if caught.
The effectiveness of bandit signs is up for debate. A few years ago, I would have said that bandit signs worked great. But now they are everywhere and commonplace, people might be numb to them. Nevertheless, if you are the only sign posted, people will notice.
And if you pepper your farm area heavily, you will generate leads from bandit signs. Bandit signs are relatively inexpensive, roughly $2/sign, and you can hire people to post them. But you might have to have to put the signs up every 2-4 weeks, depending on how fast the "sign police" in your market do their clean sweep of the area.
- Inexpensive strategy
- Can reach a broad audience if you want
- Not targeted; "shotgun" approach
- May be illegal in your city
- Frowned-upon by some individuals as "eyesores"
Newspaper/Phone Book Ads
Like all service providers, placing an advertisement in the newspaper or phone book is always an option. But let me stop you here. This type of marketing has been by far the least effective method for me. It is expensive, sometimes prohibitively costly depending on your market, and is not targeted.
Sure, it can reach a broad audience, but is not worth the cost of the ad for me. And like all other ads, you will be clumped together with all other companies that provide similar services. So it's hard for you to stand out, relative to the other marketing strategies already covered.
Like I said, I've had very bad results from placing these type of ads. So bad, that for one of my phone book ads, I only received 2 calls over the course of a year. And one of them asked me if I buy mobile homes! That might be an opportunity for some investors, but that doesn't float my boat.
- Can reach a broad audience
- Very costly
- Not targeted
- Doesn't generate quality leads (for real estate investor purposes)
Now that I've covered the top 5 marketing strategies, I hope that you have a better understanding of what you want to employ in your business. But remember to test more than one strategy in your market to see what gets you the best results. This is the only way that you will find what works in your market. Go out there and make it happen!
