All Forum Posts by: Doug Pretorius

I've always liked that story, Dick, thanks for reminding us all how powerful perception is!

I believe the slowdown at this time of year is more of a self-fulfilling prophesy than anything else. If everyone believes that this time of year is slow, then they won't work as hard, thus turning perception into reality.

Never mind investors who focus on highly motivated buyers and sellers. I know of agents who say December is their BEST month. Although it's true that fewer buyers come out to look at houses, the ones who do are VERY serious about buying.

I notice another thing happening. The "slow" time of year used to be from the week before Christmas to New Years. Then it became the entire month of December and the first 2 weeks of January. Now some say they write off everything between Thanksgiving and March! It won't be long before they say the only time you can buy or sell houses is in May, LOL :D

Ryan, well I don't know how realistic it is to expect anywhere else, I'm just saying what my results have been up to this point in my own market. Years ago I used to mail FSBOs and FRBOs and I got an even higher response (FRBOs were around 25%). But I ended up just saving the money AND increasing my contact rate to 60%+ by cold calling them instead, so I haven't tested out that market for postcards in the last 4 or 5 years.

Have you heard of a company called Leasing to Buy? They're based in Fort Worth and do lease options exclusively. They also get most of their deals from mailing every active listing every month.

Here in Southern Ontario rents for apartments have continued to climb slowly throughout the housing boom. Rents for houses however have risen dramatically, close to 50% in the last 3 years!

Justin, yes there's a slow down by UNmotivated buyers and sellers. They don't NEED to buy or sell so they can choose their timing. Motivated buyers and sellers don't have that luxury which is why there's little or no difference between seasons or around the holidays.

Unfortunately there's no way to back up that statement with data because no one tracks motivated buyers and sellers seperately from all the other sales.

William, the "secret" is a combination of 3 things:
1. Message
2. Medium
3. Market

Message: The more heavily it screens sellers the fewer calls you get. I send all of my calls to voicemail or website so my goal is to generate the highest response possible and let Step 2 of the marketing process screen them.

With that in mind I use the headline: House still not sold? Just about every seller feels that their house hasn't sold fast enough so this doesn't really screen anyone out, BUT it does tug at their frustration. I find the body of the message should be as short as possible. I've even sent out postcards that only had the headline and my phone number and they work well. But when I include some text it's usually informal, like I'm just a guy who's interested in their house.

Medium: It's postcards hands-down for me. I get 3 times as many calls from postcards as I do from letters. Bright yellow cardstock with black text in Courier New font works well for me. Although with the prices you can get full color glossy postcards printed for these days, I might try that in the near future.

Market: This is probably the most important component. I market to active MLS listings. I'm not trying to cut the agent out of their commission, afterall the SELLER is still responsible for that. BUT I've learned through agonizing experience that it's necessary to bypass the agent to get the offer presented properly (or at all).

IMO it all depends on your goals. If you're looking to buy houses around asking price for long-term rentals, then any agent that gets back to you will do.

On the other extreme, if you're looking to buy houses creatively with 100% seller financing, then going to just about any agent would be a complete waste of time.

For anything else you'll want to find an agent who specializes in that niche, whether you're a first-time buyer or looking for a vacation property.

Finding agents for investments is by far the hardest because lots of agents say they're willing to present lots of offers, or understand investing, or invest themselves, but they're lying. In fact it's so hard to find an agent who can fit into your investment strategy that I eventually gave up. It's much easier to just go out and find your own deals. Plus you don't have to listen to a bunch of complainers telling you what you do for a living doesn't work!

You didn't really expect it to be THAT easy did you? If it was, there wouldn't be any money to be made because everybody would be doing it!

You didn't do anything wrong, you figured out the numbers that worked for you and made the offer, that's what we all do.

What's next? Make about 500 more offers just like that one and you'll get some deals. Sorry but I'm not into sugar-coating the truth. Real estate investing is about grinding out hundreds of calls and offers and having your BEST proposal shot down over and over and over again.

There's nothing sexy about investing, it's just plain old hard work. But it's fun at times and rewarding too.

If your ship doesn't come in, swim out to it!

I haven't noticed any major difference between seasons and I'm in a market where weather is a factor. I think this is because motivated buyers and sellers don't choose to become motivated, something happens that causes them to become so, and they don't have any control over the timing of that "something".

One difference I have noticed is that I tend to get more calls from tire-kickers in the summer and fewer in the winter. But the number of motivated leads remains pretty consistent.

Besides, with sellers in particular, if you aren't getting calls in then you can always make calls out to pick up the slack.

I typically get a 10% or better response from postcard mailings.

My first deal was a Lease/Option from a tired landlord and I was 22 years old at the time. It was a 3/1 rowhouse with tenants in place. I wrote up the paperwork myself and looking back realize I had NO business doing so! Thankfully it still worked out.

My lease was about $200/month under market but so was the tenant's rent. I talked to them about putting it up to market rates and they were like: "We were wondering when we would have to start paying for this place!" So I had an instant positive cash flow.

Next, the option price was for the mortgage balance at the time of purchase. 18 months later I exercised for 25% under market value.