All Forum Posts by: Lucas Machado

@Matt Cramer You're best option for generating motivated seller leads in opening a conversion optimized website and working diligently, on SEO, Google Adwords, Facebook, Bing, Yahoo, etc. lead generation. I haven't dabbled much in the Facebook game, but SEO/Google Adwords leads are off the charts. Direct-mail and bandit signs aren't in the same stratosphere.

For right now, you need to really focus on these topics as you are selecting your website: (1) https; (2) mobile compatibility; (3) site speed. Obviously, keywords still play a role, but that's the easy part anyone can handle. Other concerns to watch out for is duplicative content and black-hat promises. Though, in all honesty, a lot of my competitors have done quite well utilizing black-hat. Hopefully, Google catches up with them.

You have old stalwarts like direct-mail. For the most part, the tried and true direct market methods are still profitable - but you need to accept the fact that you have to go through 5 non-motivated to get to 1 motivated. Probate/estate, back-taxes, out-of-state owners all get the job done. There is lots of competition - but hey, there's competition in everything. The one word of caution I'd offer - pay very close attention to your last sale dates and low equity leads. I've seen people talk about pre-foreclosures - but I just don't see deals happening there. In fact, I'd go as far as to stay I don't spend money marketing to any property that has had any kind of substantial purchase/sale post-2004.  I can spend money better other places.

Bandit signs - that's OK. You could be entering illegal territory with you municpality - so you probably need to set up a series of Google voice-numbers.

Cold calling is legit - but time consuming and you need a hyper focused list. I'm just delving into this now - and I can tell you the cold calling leads are hard to generate - BUT - they are good leads if you targeted the cold calls right. If you're just cold calling without proper targeting, I'd imagine that's an exercise in futility unless you are doing so on a mass scale with cheap labor.

@Melissa Gittens Build your website - like yesterday. In-bound marketing funnels - not push funnels - will put you ahead of 99% of investors if you succeed in that space. My online leads are bar none the best leads. People talk about meeting with motivated sellers? Online leads in many cases are so motivated that you can just Docusign over a contract and get it signed. It's a bit of work and cost - but what isn't? You simply can't beat the motivated lead contacting you.

There's plenty of low cost options . . . you need a mobile optimized HTTPS site with good conversion set-up. It's not rocket science - but you do have to take the initiative to learn and grow understanding the online space. 

@Nate Si The response rates are dependent on your market. For example, in South Florida, when I get a direct-mail lead their first comment is "you're the 100th postcard I've gotten." The out of state people just like to call and yell because they get so many yellow letters. I think response rates are also a bit misleading - it's largely irrelevant. You closing deals and making money? The right leads make that happen.

I've rarely seen deals at the higher volumes. And before you even spend a dollar on that - you need to figure out your exit strategy. Are you even going to be credible for a $500,000 asset?

@Graham Richard Anderson 

Search engine optimization and Google Adwords are by far the best lead generation methods. It's not even close. You need to get yourself a website and begin to build it out. Start ASAP: it depends on various things, but Google won't rank you for a few months in most cases. Depending on competitors, can take a year. You have quite a few options in that regard - but none of it is expensive to get going.

For your direct-mail alternative marketing, it is very cost prohibitive. It's somewhat of an odd concept to wrap your head around - but you need "targeted" "volume". Sending 100 mail pieces per mo isn't gong to make you any money. That said, sending 10,000 per month to a crappy designed list probably won't help you either.

Cold calling is a good free source of leads. I use cold calling to supplement some of my direct-mail - the leads are pretty good. Have a couple deals that could be brewing - but haven't gotten one quite yet (about 2 months into my cold call team).

MLS - it's tough. Two things: (1) you can't be tight, you need to make aggressive offers. If you can't work deals at tighter margins - then you can't do MLS; (2) you need follow-up, people put random stuff under contract all the time, once it falls through you can step in - but you need to be there.

@Neil Sinha I can only speak for my own market and own volume.

I would never waste time meeting with someone before discussing price. Truth is, I've spoken with sellers that are insanely motivated - back taxes, house is a wreck, needs to move for health reasons. But, they get a number in your head, and are stuck with it.

Also - you can't necessarily wait for a sit down meeting. In some cases, using a service like "Docusign" will yield better results. If you can get a contract out, reviewed, and signed in a few hours (this just happened to me) it can be better than going in person.

That said, I've gone in person lots of times and it has a positive impact. However, you just need to make sure the seller is appropriately motivated at a "ball park" price and then you can firm up numbers and even bring a contract over with you.

Also - don't sleep on starting a website. Seems like you're getting pretty hung up on the nitty-gritty of direct-mail details. I've never found modifying a sentence or two is going to change anything. I have my envelopes hand-written - that will make people open it. Also - use a return address label the first time to get the "return to sender." I think that's really all your looking for if you're going the letter route. I only use letters for probate/estates, for other stuff, I just want volume to find that motivated seed out there - so I go postcards. Not trying to play mind games to get someone to pick up the phone.

Direct-mail is about volume, weeding through the huge amount of bad leads you can, focusing on the good ones, and following up regularly to make sure you are there when the day comes.

DEFINITELY don't sleep on a motivated seller website. Leads are just better - plain and simple. It's also can be much cheaper if you plan everything our correctly. SEO - time consuming - but free. Google Adwords tighten it up with your keywords - and you can compete with the big boys even with only $500-$1,000 a mo.

@Sean Carroll 

Regarding your targets, units of 5 to 50, I would not even do direct-mail.

First of all, you are mailing investors. Investors - at least in my market - are notorious for not even selling at a market rate. If they are getting cash flow, there's just zero motivation to sell. You are throwing away money. Not just that, usually direct-mail works best going to someone's house - with investors you could be mailing property managers, business offices, PO box. I doubt too many people with 50 units have their home address on the property appraiser.

Second, direct mail not only needs to be targeted - but you really need some volume. Not sure how much volume you are going to get for 5 to 50 units.

Third, if I wanted to contact investors with 5 to 50 units, I'd just call them. Probably wouldn't be hard to find their number. It's not like you need to call 10,000 people.

Fourth, big commercial properties are heavily marketed. I'd connect with some commercial brokers.

@Jerryll Noorden @Tyler Cody I completely and totally agree with everything Jerryll said.

(1) SEO leads (or Google Adwords is about the same) is the absolute hottest lead category. There can be no doubt. Direct-mail leads take a very long time to cultivate. MLS leads are competitive and have pretty tight margins. Cold Calling you have to go through a lot of filler.

Don't get me wrong, you can make money using every strategy, but SEO/Adwords . . .we are talking about people that are ready to sell ON THE SPOT . . . True story - I got a big deal on an SEO lead that came in on Wednesday. I had a contract at my price signed in 4 hours. I am also doing an equivalent value DMM deal - and I had to chase that lead for nearly two years.

(2) I'm not sure why everyone is trying to pay for an SEO "guru". They can't really tell you anything you can't learn for free - and none of it is really rocket science. You can get good sites like InvestorCarrot at minimal cost - and they are mobile friendly.

At most, I'd pay for like a monthly consultant. Perhaps a conversation for $50 to $100 one a month. Don't drop anymore than that.

One thing I will say though - I think a lot of this depends on your market. I have like 10,000 competing sites in Miami, Fort Lauderdale. I'm on page 1 after about 8 months of hard work - but leaping over serious competitors is  a challenge.

I also have a ton of stuff business related to run - so I can't spend 5 hours a day doing SEO. Perhaps if you're just wholesaling  . . . but how could I bounce back and forth between 4 rehab projects and have 5 hours a day for sitting at a desk doing SEO . . .

This is definitely a complicated question. It could even have substantial tax ramifications; depending how you structure it. I think perhaps the best thing you could do is reach an initial hand-shake agreement as to how you guys would like to work together, and then make it contractual on each deal.

For example, I work with some newer investors that may need help executing on their deal, either for a buyer network or money for a flip. In this case, I'd sign a joint venture agreement at the start perhaps doing a 50/50 profit split.

When you're cross over into cold call territory, you're really talking about sales strategy. Life is a sale I suppose in all levels.

You need to get them to say YES. Train them. You can't just jump into DO YOU HAVE ANY INTEREST IN SELLING.

The way I do it is like this: 

"Hi, this is Lucas Machado (always introduce yourself - so they don't say WHO IS THIS)

I was hoping to speak to [owner name] (take a brief pause, so they will hopefully identify themselves - lots of miss-hits on telephone info)

Ok - I saw in the public record you owned XYZ property (hopefully another YES)

Ok great. The reason I'm calling is that I'm interested in purchasing property in the area. Would you be interesting in hearing a cash offer?"

You don't want to dive into asking about selling - it's a much easier ask to put a cash offer on the table.

Once you go through the script with them, you should be able to get a sense whether its a good lead/bad lead. Anything that needs repairs or has some motivating factor is a good lead IMO worth following up.

One thing about this . . .

A 3-month direct-mail campaign is really a stretch to be able to draw any major conclusions.

Direct-mail is such a long game. It can take 3-months to respond, 3-months to negotiate, 1 month to get a contract signed, and then another to close the deal. Then, depending on your investing strategy, there can still be lots of time.

I think it's much much much better to get yourself a website. The in-bound marketing leads can sometimes be same day signed contracts. Direct-mail I've literally never had anything like that. Chase leads down for 1 year, or even 2 years, to get ink to paper.

Now, of course, I've heard stories, "I sent one letter and net a $50k deal!"

I guess it happens.