The business of Real Estate Investing is very much a people business. Seasoned professionals know that at the end of the day, it’s all about relationships. Effective agents have clients that use their services, recommendations and expertise over a lifetime and in the process become friends. Newbie would-be investors can learn a lot by establishing a “know, like, and trust” relationship with their motivated sellers.
If you are a real estate agent, you’ll have a campaign to categorize yourself in your target market and build a “know, like and trust” identity. The average seller generally makes the decision to sell over a period of time and will usually seek out an established professional. As a real estate investor, marketing yourself to motivated (distressed) sellers is different than traditional real estate marketing strategies. Still, this one factor always applies; people tend to do business with people they know, like, and trust.
The real estate investor who has succeeded to create that “know, like, and trust” connection with a motivated seller is the one who will close the deal in most cases. Still, there are many motivated sellers who will choose a higher offer – often made by the newbie – with the result that the deal doesn’t go through. These are the people who only see the money. A capable investor who has the experience to help will make a more realistic offer and often that offer will be rejected initially.
Work on the “know, like and trust” relationship with your sellers and wait patiently. There are many reasons transactions fail; for example the newbie investor can’t find a wholesale buyer or other investor because his offer is too high. If this is the case, be prepared to hear from the seller and answer the inevitable questions as to why you can’t match the original (now retracted) offer.
But getting your name ( and your face) out there in your target marketplace can be tough. The expensive options like billboards or benches have never been popular marketing tools for real estate investors. The person who is in a distressed position and has to sell their home quickly is unlikely to have the time or the resources to do extensive internet research. They won’t be spending time ferreting out the best agents for the area but will be open to “we buy houses” and “for cash” type direct mailings, door hangers or postcards.
One effective marketing ploy is a “we buy houses” ad in the classifieds of local newspapers. Another is to put “We Buy houses” ads or pamphlets at unemployment offices. Many unemployed people are facing challenges meeting their payments and may need a solution. A good tactic is passive marketing by advertising “We Buy Houses” embroidered on your shirt or cap.
Part of the problem is that the business of flipping houses means buying is usually a one-off transaction. Few motivated sellers have more than one property to sell and so there’s little chance of repeat business. But motivated sellers have friends and family too and will recommend a professional who they trust.