Isn't Real Estate Investing Just One Big Marketing Game?

*Starters will get a lot out of this* 

I remember the other year Cash Flow 101 was the game to play and among it all its left somewhat of an impression on my view of this business.  Basically the goal was to get passive income that exceeded your expenses and then you were out of the rat race and raking in the loot.  Kind of a comical version of the business but it did offer some light-heartedness in an otherwise high stakes world.

Humor can diffuse many things, taking a light approach to serious business is an advantage because your nerves aren't on the brink of failure and you play the game to win (or more specifically the win-win-win).

I embrace real estate for its marketing and to me anyone can learn how to do the 'how to's' of putting together a wholesale deal with options and assignments but the real throttle is your marketing which controls the pace of your business.  The more seller leads you have coming in and the stronger your buyers list, the more apparent it is that your team is doing well.

So here is how the game lays out if you're getting started and go into wholesaling and whatever else is in your reach:

Start by finding a deal:

In order for anyone to really take you seriously it can be a great deal easier if you have a killer deal in your hand.  Note that many successful wholesalers really only have a handful of rehabbers as buyers.  If you have a deal in hand and make use of your REIA (Real Estate Investor Association) then you will have a real estate ice breaker.  If I had a $100 dollar bill, but an option on it for $60 and went into a room full of investors who are all networking and talking about investments, then I'm sure that there are going to be some people in that room that will want to talk to me.  Same goes for an option.

Now anything that can provide such opportunity is not without its due diligence.  If it was simply that easy, everyone would do it and the discounts would be bidded into a distant memory.  But if you learn how to put deals together and how to market, then you are on track towards getting the attention of rehabbers.

There's plenty of material out there on how to put deals together and I'll let it speak for itself.  Here I care to address the marketing side of things and since the scope of my blog is to focus on the emerging techniques (in this day and age, internet and design) I will use this post to cover what I'm not going to be covering in future posts.  Not to worry, but it's just the way it was meant to be lol.

Ok so you're getting into wholesaling and here's you objective:

Get a lead on a motivated seller, contact, and convert.  Motivated seller gives you an option to purchase the property at a significant discount (typically there are repairs that need to be taken into account) and you find a rehabber who is looking for a fixer upper with a spread left over after repairs and your fee.  You then option it over to them, seller gets their money, rehabber gets their property, you get your first deal and an advertising budget (win-win-win)!

2 Parts Marketing 1 Part Deal

In order to make this happen you have to find a seller and find a buyer (the great trial of real estate).  Marketing is what will facilitate the coming together of these two sides and it's what will regulate the prosperity of your business.  Good marketing leads to more leads, the more leads you have, the more good leads you'll end up with, and finally if you have good leads on both sides of the aisle you are doing great.

Marketing Part 1 -

You want to find that motivated seller, the one who is going to lose the house without a penny to show for it unless you show up.  Through our marketing we have found that sellers typically respond well to tradtional forms of advertising such as:

• Flyers
• Bandit Signs
• Business Cards
• Print Advertisements
• Letters

For those of you who want to spend the least amount of money on leads I would suggest buying a list and going door knocking or call every FSBO in the paper and find out what the deal is.  But if you want to create a more systematic approach to flush out motivated sellers then what I would recommend out of the 5 listed above would be bandit signs, flyers, and cards being the most important.

Your goal here is to strike a motivated seller into contact you so you can get an idea as to what the situation is, what the repairs may be, and decide if it is worth taking a look at.  Once you get to the property you estimate repairs (which isn't as hard as you think because the discount you negotiate should cover minor errors) then run the numbers, formulate your MAO and go back to the owner.  Negotiate with the owner, explain how this works for them (make it a win3x), and get the property under an option.

Marketing Part 2 -

Now that you have the first part of the equation you just need to solve for x.  Finding that buyer...  Well if you ran the numbers and stayed under your MAO you should have an ace up your sleeve at the next REIA meeting.  This ace is your bankroll that seats you next to the rehabber so you can make contacts, personal connection, and a business relationship.  When you find a rehabber-buyer then you are in the paint and even if this isn't the deal for them you can still get the rebound and score a future deal.

It is important to nurture your buyers list because that is going to be your ace in the hole when you go back to trying to find more motivated sellers.  It is much easier to play when you already have a buyer in mind that you know this next deal would be perfect for and since you have the opportunity, take advantage of it!

Now the first part was advertisement driven marketing while the latter was all networking through your REIA.  This is a certain case and as your real estate investment operations will grow and you'll have to encounter marketing in all its forms, there will always be ways to do things more effectively, more systematically, and simply put, easily.  In our business it is all about stacking he deck in our favor because we are playing a numbers game through and through and since marketing makes up a large portion of it, it is important to stay on top of the latest marketing strategies/opportunities.

New Wave of Marketing?

These days it almost seems criminal for a business not to have a website, it's easier to forgive not having a YouTube channel or a blog, but we are living in the day and age of the internet where the easiest way to find an answer is to google it and the traffic is too juicy to deny.  The internet provides a whole new playing field for investors to play on and as time goes on it will be the field you will want to call home.

As with everything else, there are barriers to entry and in this case marketing on the web is going to be a very real barrier for many as time goes on.  But I say barriers to entry are what makes the game that much more interesting and fair.  If real estate investing was done by everyone then REO discounts wouldn't be what they are.  Motivated sellers would be overwhelmed with letters, door knockers, and what have you.  But technology spreads out all the styles so it isn't just one direct shock to the seller and it also provides those with the drive and desire to gain an edge on the competition by having a direct way to improve their business and get something out of their hard work.

Let's face it, if all it took to get the attention of a seller was a letter and a stamp the spreads would shrink drastically.  But since there are many aspects to it not everyone can jump in, lick stamps, and get their piece of the pie, leaving more for us.

So now we are in the age of technology, let's rock.