I wan to start with a little rant. How much do you think it costs to run a classified ad in a major newspaper like AJC? The ones we run set us back about $200 for two weekends. From such ads we get quite a number of “investors” calling us, wanting a free house…. Go and read my old post I want houses with 0 down and take over payments. Someone would think that a desperate homeowner would spend $200 to say to all metro Atlanta: “TAKE MY HOME”. Get real!
Ok. I am done ranting. Now really think, would a desperate person spend $200 to place a classified ad in the newspaper to give away their house? I do not think so. Here we have the very first mistake that most of real estate investors make – calling on classified ads in a newspaper where you need to pay for classified ads.
Second most common mistake I think is placing an ad “We buy houses” in the local newspaper. Have you looked how many these type of ads you see there. Last time I checked, I counted 13 “We buy houses” and 19 others with a different wording, but meaning exactly the same. Stop following the herd. Do something different.
Third most common mistake I see beginner real estate investors making is wrong approach to direct mail marketing. They either
- select a very small area and mail them constantly
- they mail the whole city one time.
In the first case investor would mail only to 1000 homes in a subdivision where about 10 homes get sold every month and they will continue mailing these same homeowners every month. This approach can not produce enough leads to have a deal to recoup marketing expenses.
In second case the area is too big and repetition too small. You need to mail at least 3 times to the same person to produce results.
So my advise would be select a big enough area and target your prospect sellers. Targeting means that you are looking for something specific. It can be landlords who just evicted their tenant, homeowners who can not make their mortgage payments or someone who listed their home 3 times and could not sell it. There are ways to get your hands on the list of such homes, you just have to spend some time or cash.