As you may know I like to make the beta reading of my book open sourced so the community that will be using them can actually gain the information and request changes or additional information to be added as the book is being written.
This post is One Chapter of my coming book, “GET THE DEAL”. Which the idea has it’s origins from the live training with the same name that I have taught to thousands of real estate investors all across the country and have had time to refine the information to answer the questions most asked at those trainings. Without further ado I want to encourage you to read this chapter and leave your suggestions in the comments below!
How Do You Get The Deal? (FREE Strategies)
“Many of life’s failures are people who did not realize how close they were to success when they gave up.”
– Thomas Edison
As Edison mentioned it’s not the people who put in the work that are forgotten. It is the people who were putting in the work, but gave up before their work could produce the results they were looking for. In order to be successful you must have a realist expectation on the results you will get from your efforts. You also must be very honest with yourself on whether you are actually putting in the right work. Are you doing it the right way and are you working with the right people or in the right market?
Before I start sharing some of the free marketing strategies that are available to you. I want to confess that I didn’t have to do much prospecting for sellers when I started this business back in 2012. My first 8 properties were all purchased on MLS. Even with my real estate agency business I primarily encourage my team of agents to work with the hundreds of investment buyers that my training programs create.
When it comes to finding off-market deals I rely so heavily on my social media presence to attract highly motivated wholesalers to my FREE wholesaler trainings online. As these talented and highly motivated individuals start to connect with motivated sellers we have our highly trained agent submit our offers and we find most of my deals through this network.
With that disclaimer out of the way I want to assure you that I have personally gone through and either personally booked an appointment or closed a deal on every one of these lead generation strategies I am about to share with you.
I believe it is important to first learn something before you do it and that the whole reason I have ever done a thing is to one day teach that thing to someone who will do it better than me.
GET THE DEAL (Free Strategies)
Have You started to ask the question, How do you get the deal? How do you actually find the deal? Where is the deal? Now that you know that you’re looking for a certain location and certain property type in that location, it’s time to start hunting. This is the most rewarding and at the same time the most difficult part of real estate.
We talked about finding the money to do your deals in the, “Money” section. For now you are going to have to take my word for it that there is so much money and that those skills are easier and not as important as finding the deal itself.
We are going to talk about all the work and the labor that needs to be done on any project later in the, “People” section of the book and just like the money please trust me that if you can find a good deal only then do you know what kind of crew/s to hire. Again in the end if there isn’t a deal, you don’t need money and you don’t need labor.
The deal is the first part of the process. We can talk about strategy all day, we can talk about location and property type and negotiation tactics all day, but until you find a deal, you haven’t began the real estate investment process. It’s all about finding the deal, so in these next 2 chapters I’m going to teach you how to, “GET THE DEAL”. We first started teach our “GET THE DEAL” at live real estate training events and the tactics in this book have been tested and proved by thousands of investors just like you all across the country. They really work.
Why Can’t You Use MLS To Find A Deal?
Why can’t you rely on online websites like Zillow, Redfin and Realtor to find your next deal for real estate? Well the problem is everybody can see it and if it was a “real” deal somebody would have bought it already.
To find a killer deal in real estate you want to go “off-market”, where nobody else can see it, where there’s no competition. When you want to sell a piece of real estate you go online, you put it on MLS, Zillow, Realtor, Redfin, and similar sites so you can get the maximum amount of eyes on your property which will hopefully drive up the price.
For this part of the game you’re looking to find deals, and to do that we’ve got to find them offline, off-market, where nobody else can see it. The only way to find these off-market deals is to beat other investors and real estate agents to the seller first.
The tools you have are your sphere of influence, marketing online, doing email marketing campaigns, mailers, cold calling, and building lists. There are a lot of systems and strategies that can be used for finding deals. I am going to teach you the best ones that have been successful for me and our investors, but first lets discuss why you can’t just rely on a real estate agent to bring you deals.
What Most Realtors Can’t Do For You.
Typically when you get into the business everybody says get a realtor, they’re going to go find you property. This solution can be very effective if you don’t currently own any real estate and are looking for your first deal. That is assuming you are using cheap owner occupied financing on your first deal and are incorporating some kind of house hack into your strategy. Either by renting out rooms or by renting out other units in a 2-4 unit multifamily.
For more experienced investors sometimes, that have already used their cheap financing options you are going to need to find yourself a better deal. Full disclosure I am a licensed realtor and I’ve been a realtor since 2014.
One of the other concerns new and experienced investors rightfully have is that if I find a great deal, I’m either going to buy it myself or I’m going to list it, which is going to put a lot of eyes on the deal. Let me clear this myth up.
Even though I do have access to an abundance of private money and my own investment funds, I don’t always have the same appetite for a deal that you might. In many cases I am finding that I will not move on a single family or duplex that would be perfect for an investor or that the 3 family or 6 family someone on my team is presenting to you was outside of my personal investment criteria.
Just because a successful investor doesn’t buy something doesn’t mean it isn’t a good deal for you. In fact, my mentor won’t even touch 3 family homes anymore. If it isn’t a 6 unit building or larger he just doesn’t have the desire to go through the purchasing process for such a small deal in his eyes.
I know investors who won’t look at a deal smaller than 100 units, but these same investors started out flipping single family homes and buying small multi-families. Over time your investment criteria is going to get more specific and you will pass on deals that are great for other investors also.
Anyway, what I am really getting at here is that you can’t just rely on a Realtor to bring you deals. You should be working with a Realtor to go on appointments and negotiate for you, but when it comes to finding deals. Successful real estate investors take matters into their own hands. You really have to do your own marketing, build your own network, go out and talk to multiple realtors, have a hundred realtors and wholesalers looking for your ideal property in your specific market.
Encourage other wholesalers to find property for you if you are ready to take down deals. If you are at the point where you’re still wholesaling, you haven’t gotten to a place where you buy your own deals, then you certainly want to be going out and finding property beyond just asking a realtor to send your deals.
What Is A Motivated Seller?
What causes somebody to sell their home at a discounted price? I have been I this industry for a while and every so often I hear someone whispering that they believe we must be taking advantage of people who are desperate or that we are manipulating people to sell their houses at a discount.
Let me fist that that those assumptions couldn’t be further from the truth. I am sure that there may be people out there who have done unethical deals, but that kind of investing will eventually bring your company into many lawsuits and ultimately failure. In order to be hugely successful in this business you must make sure that everyone wins in a deal they do with you.
We get prices so low because a person is so motivated to move on a short time-frame, the house is in serious disrepair or they are frustrated with being landlords. If somebody has lost a family member, if the house is in disrepair, if the tenants are troublesome, or frustrating them, or suing them, a seller could be absolutely motivated to get rid of the property quickly and they’d be willing to discount the price just to get out of it.
You don’t know a person’s situation until you’ve gotten into the home and talked to them, and your goal at that point is to discover if they have what I call a “bleeding neck”. Which is simply a way of saying that this pain in the neck is so bad that it feels like it is “killing” them. They really desire to go somewhere else, they’re “done” managing a property, they’re done living there, or the house is in such disrepair that they can’t handle it themselves and it’s becoming a safety hazard or a concern for the family.
Certain motivating factors will be more prevalent in different markets and it is up to you to have a good understanding of the demographic of the people you serve.
Who Is Your Demographic?
Well first, if you are not a marketing expert or a trained sales person, you may not understand what a demographic is. The definition in the dictionary is, “a particular sector of a population”. Basically it’s a type of person who consistently thinks and acts a certain way. Understanding the demographics within your market can almost feel like stereotyping. If the shoe fits, you might have more success with a certain demographic in your market.
Understanding the demographics of your ideal motivated seller is going to take some research along with some trial and error. These are some of the questions you are going to want to start asking: where do they live, what do they look like, how do they act. So for real estate investing, in order to find a motivated seller, we found there are certain demographics that are very consistent with people who end up being motivated across the country.
These may change in your market, but there are many factors that will keep this demographic motivated to sell. For instance, 55 year old boomers, between 55 to a hundred years old tend to be more motivated to sell their properties, they’ve been there, they’ve used it for a long period of time. It may have decayed over time or the use/location is no longer what they require in their glory years. Maybe the home is now too big for empty nesters.
Another demographic factor could be that they’ve been on the home for more than 10 years. Typically in America, people sell a house every 7 years, so if you find a seller who’s been in their home more than 7 years, they may be more motivated and to a point that they are more than ready to sell.
Absentee landlords are another favorite demographic. People who don’t live on the property are more detached from the property, and may be more motivated to sell if the timing is right. Here’s a list of some options that some of our investors have used to find motivated sellers in no particular order:
- Working With Probate Attorneys
- Building Probate Lists
- Building Lists Of Divorce Filings
- Tax Liens
- Absentee Landlords
- Out Of State Landlords
- People Who Own Homes Free And Clear Or High Equity Lists
- Both Pre-Foreclosure & Foreclosure Lists
- Owned For More Than 7 Years
- 55+ Baby Boomers
The above lists can be built through numerous online resources and databases. I recently wrote a post on my blog with many of the list building resources we have used if you go to GualterAmarelo.com I will keep it updated as I find more.
So we are going to talk about more about building lists in a little bit, but as far as our discussion of demographics it’s important to understand, that these don’t change very much. If you stay within this search criteria, you are going to find more motivated sellers than you would just farming an area. Now that you have a better idea of their motivating factors, lets look into how you can find them.
Marketing To Your Target Audience.
Now that you understand who your demographics are, it’s time to learn all the different tactics and strategies to get in front of them. The goal is to get them to call you back and book appointments so they will eventually agree to sell you their properties.
There are a series of marketing tactics that are consistent, that the most successful investors across the country have been using for years and that will likely always work. Then there are a few that are relatively new to the industry, such as social media, landing pages, texting, ringless voicemail drops, etc..
One of the oldest form of marketing is door-knocking and mailing campaigns. As far back as investors have been investing, they have been knocking on doors asking their neighbors to sell their homes at a discount. Ever since the postal service was put into place sending letters to people telling them that they want to buy their house became another.
These are old-school, always worked and they still work today. The first is high energy/time intensive and the other one is high cost. The third classic is cold-calling which has been upgraded with the advent of multi-dialing system and robot dialers.
For the most part many of these tactics both new and old involve building lists and implementing a first contact and follow up strategy to build relationships with potentially motivated sellers.
There are many different tactics and strategies that work and new ones are always being added as technology and our culture continue to evolve. We are going to discuss the tried and true methods in this book and you are encouraged to learn about new ones as they become available to you. The first step to get you setup, is to build a list. Let’s get started!
Building A List Is The Beginning Of Your Investment Strategy.
You’ve identified your target demographic, now you’re going to either fill your list with cold leads or warm leads. I am going to encourage you to start with warm leads because they’re the easiest people to identify, you start with your sphere of network, your sphere of influence.
Sphere of influence
These are people you already know, friends and family members. Think of someone who owns real estate, and might be interested in selling to you. Don’t just ask your sphere to sell their real estate to you though. They could also know other people who would be motivated sellers, willing to sell you some property.
If your sphere of influence is not built yet, now is the time to call your family members and friends, tell them “Hey look, this is what I’m looking to do. I’m looking to buy some real estate at a discount. Who do you know who might be interested in selling?” It’s a very simple strategy and it should be done very quickly because of it’s simplicity.
Let’s be honest. If you like these people it is important to see how they are doing and to share with them what you are working on anyway. Just a warning though, do not expect everyone to be supportive of this new venture. Many people are afraid of real estate investing and as I mentioned earlier, some people may believe that investors take advantage of people. You have been warned.
Once you’ve exhausted your sphere, you are ready to move into networking events. National association of real estate investors is a great way to go. You can also go to meetup.com, and start searching for anything real estate related as far as networking events. You’re going to be working on growing these over time.
Building cold lists, are action you can build today and quickly start marketing with one of the other strategies that we’re going to talk about in a little bit. Building the list starts with a list building website or you can ask your investor friendly real estate agent to provide a list with your specifications.
In the beginning when building lists, keep your lists small. Around 200-1,000 addresses is a good sized list to start practicing and effectively implementing 1 or 2 of the marketing strategies per week. Heed my warning and do not add to the list until you have effectively implemented 3-5 of the strategies below fully. Then you are welcome to expand as you require more deals. I know investors who have lists in the tens of thousands and are spread across many counties, but they have built the back-end systems to handle lists of this size. Crawl before you walk.
Make sure you get the location down to the city or town, zip code and property type. For example if you’re investing in the city of Fall River, and you’re looking for three families, there’s only about 3,000 in the city. Once you start putting on some other requirements such as age of owner, length of time owned, etc. The list will start to become much smaller and hotter.
Once you have your list you can then go to an outsourcing site like Fiverr and get the owners actual phone numbers and emails which you can later use to find their Facebook accounts. There’s more research you can do later on once you’ve built your list, but the first key part is identifying the properties and their owners.
Only once you have a list, can you start with all of the other marketing tactics and strategies we are going to discuss and slowly the pieces will start to fall into place.
Action Step: Build your first list within the next 24 hours. Action is the enemy of procrastination so take this powerful action step now, before the day is through.
Real estate investor meetups, real estate investor associations
These are some of the best spots for you to meet realtors, other investors, wholesalers, attorneys, lenders and in some cases these groups have investors who may be willing to sell a turn-key investment property to you.
These are spots where you’re go to learn about real estate investing and build relationships with other like-minded people just like you who are looking to learn and grow. Your network is your net-worth, so building a network of wholesalers, realtors and mentors is important. You are going to learn from and possibly work with and befriend many of the investors you meet at these events.
You are also going to want to seek out and investors who are looking to purchase real estate in your market, allowing you to start building your buyers list. The key point to remember when networking is that you never know who may bring you a deal, lend you money or help build your business, so meet everyone and find out what they are looking for. Some of these people may introduce you to the key players you are going to need as we discuss building your team in the, “People” section of this book.
Now that we have discussed some of the warmer ways to build a list, lets get into colder tactics starting with a commonly misunderstood strategy. Driving for dollars.
Action Step: Go online and register for at least one local networking event or online webinar hosted by investors in your local market.
Driving For Dollars.
There’s a lot of confusion around this concept in the industry. A lot of gurus will tell you that the best wat to find a deal is to look for properties that are falling apart. Decrepit buildings, where the grass is tall, the roof looks worn out, the windows are old and there may be chipping paint on the exterior.
They say that this is hands down the best way to find a good deal. Now I don’t entirely disagree, and I know wholesalers who have been very successful with this strategy, but it is time consuming and tedious. Before I explain it I just want to let you know I prefer some of the other list building strategies much more, though this one is good to have in your toolbox.
Driving for dollars is pretty simple. As you are driving through your area, you want to write down the street name and number of these distressed properties and keep driving. Of course if you are comfortable door-knocking there is no time like the present.
Once you get back home you can add these property addresses to your list to gather phone numbers, contact the owner of the property and book and appointment. That’s where you make your money.
Driving for dollars is a way to add to your list, it is a good tactic, and if you’re going to be in your car, checking out an area anyway, you might as well take a shot at these properties that show obvious disrepair. That’s really what you’re looking for when you’re driving for dollars.
You are also looking to find out if you want to invest in this area. If this type of area you would see yourself owning rental property in, or if your investors are interested in owning in this area. So drive for dollars, build your list and contact these potential sellers often.
Action Step: The next time you are driving through your neighborhood, travel down the side streets. Go slow and pull over if you see a property that shows signs of distress.
Door knocking your list.
Door knocking is extremely effective, but also very time consuming. Even though I am introducing this early on, it is the last tactic in the order, but it has a place in your over-all strategy. First I want you to make sure you are calling them, mailing them and if possible contacting them on Facebook.
Then, and only then, is it a good use of your time to go door knock a house, because door knocking is very time consuming. An exception I want to make is that if you are targeting expired listings, then door-knocking is a very effective way to meet an already motivated seller.
Now, yes, it’s is an extremely effective tactic because when you knock on the door, they only have one of two options. They are going to open the door seeing you or they are going to ignore you. If they open the door, apologize for the interruption. Let them know you like the area and ask them if they know someone who might be interested in selling in the area.
If they say they are interested make sure to schedule an appointment to see the property at a time that is more convenient for them. If they invite you in to see the house then you may proceed to enter the home. Half of the time they will let you in to take a look right then and there. The other percentage of the time it makes more sense to book an appointment for the next day when all decision makers will be present.
Never attempt to just walk into their property. Remember the goal is an introduction and to schedule the appointment for later in the week. Here is what you can say if the conversation goes well, “I know I caught you off guard and this may not the best time for you. Would you be interested in meeting back here tomorrow at 2 o’clock. Let’s schedule the appointment now so you can be better prepared. Also if you own the property with someone else, what would be the best time to meet with both of you?”
Make sure when you schedule a time to come back and see the property that all decision makers are there with you at the same time. This way you are making them feel more comfortable and they are going to be more likely to have discussed selling to you before you arrive.
Action Step: If you have made many attempts to contact a seller with no luck. Add them to your list of properties to door-knock and put a day and time on your calendar to stop by and see if you can make contact.
Cold-calling can be used in tandem with all of the other forms of marketing. It is one of the least expensive forms of tactics, but also a very high energy. The reason calling works is because everybody has a phone. Once you get the right phone number, calling the owner is the next step. Initially it is likely they will answer the phone and they’re going to at least have a little conversation with you, but if they don’t always make sure to leave a voicemail.
The whole point in cold calling is to book an appointment. Some investors prefer to negotiate over the phone and are able to gather enough information to put an offer in, but I prefer to schedule appointments and send an investor friendly agent to negotiate your offer with the seller.
The way I run my company the whole point in cold calling is book the appointment. There are scripts you can follow, and I offer many of these in the university section of my website for free. I will also share a few of my favorite script in the next section.
Until you confirm that you have the actual sellers phone number your list may have anywhere from 5-10 potential numbers for the same address, that’s just how it starts out and many of those number may be relatives, previous owners or tenants of the building.
Unfortunately home owners may not always be honest with you at first. If you catch them at a bad time they may say that they sold the building or that they don’t own the property. You can double check the public records, and if they still show up as the owner, call back at a different time.
Building your list is extremely important. Equally important is dialing through your list consistently. If you haven’t touched that person at least once a month, you haven’t contacted them at all.
Getting a multi-line dialer that allows you to dial three or more numbers at a time is the best way to increase your productivity and is well worth the monthly cost associated with these dialers. Once you have chosen a dialer you can import your list and start dialing automatically.
I strongly encourage the use of dialers because they will take you from only being able to dial up to 25 people in an hour, to anywhere between 75-150 numbers in an hour.
Cold calling scripts
Write this script down and replace my name with yours:
“Hi, my name is Gualter Amarelo, “Pause for a second”
I’m looking to buy a property in your neighborhood. “Pause for a second”
Who do you know who’s looking to sell in the next few months?”
That’s it. The pauses are intentional. You want to make sure that you are speaking clearly so they can understand your words and process them.
There are many scripts for different opportunities and as I mentioned we have dozens of free scripts available on my website. For right now this is the script that you can use to go get on the phone and start practicing. Call somebody up, insert your name and then let them know you’re looking to buy property in their neighborhood.
I want to point out the importance of the phrase, “Who do you…”, not “Do you know”. Emphasize “Who do you know?” This makes the mind focus on who they know right now that is interested in selling property in their neighborhood. Other weaker phrases like, Do you know” create a yes or no answer that will shut down the conversation.
Try this basic script for a while and get comfortable with it before trying a different script. Practice this script at least a hundred times before you switch it or decide to go off script.
For free access to dozens of cold-calling scripts as well as list building and dialing services you can check out the many free resources at GualterAmarelo.com.
Action Step: If you have already built a list, chose a dialer and upload your list in the next 24 hours. Then create a schedule where you or another team member is dialing your list 5-10 hours per week minimum or until the entire list has been called between once per week and once per month.
There are many free marketing strategies you can use to land your next deal. Be willing to eat the frog and do the work without seeing any immediate results and one day you will be able to pay other people to do these activities for you.