Direct mail marketing has been popular with real estate investors who target specific prospects and properties, not just because of its efficiency with budget and effort but also because of the high rate of good responses from the prospects.

Of course, failure or success in real estate would also depend on how you do your direct mail marketing. There are three very important things you need to have if you want to be successful in this strategy:

1. You need to have the right prospects or targets.

2. You need to get your envelope to be opened and read by your prospects.

3. You need to make it easy for the sellers to reach you.

Finding the right prospects and sellers will require some research and statistics. You need to learn which niches, which properties, and which areas are most likely to have motivated sellers that can come to you.

For your mail to be opened and read, you can first make some experiments on which of your mails received responses and which did not. But the general advice for your mail would be that:

a.) the envelope used is a no. 10 business letter envelope

b.) you hand address them including the return address

c.) you only put your address on the return address and not include your name

d.) you use first-class postage stamps

e.) you make your handwriting neat and legible, with correct spellings (especially the names

Putting only the address and not your name on the return address will make the prospect curious as to who the mail is from. Hand addressing them will make them seem more personal than businesslike. Chances are, when curiosity takes over, they’ll open the mail and read your letter.

When using first-class postage stamps, choose the ones that will make your letter more personal. Don’t hesitate to use cute ones with the flowers if it comes down to it. These kinds of stamps can have a very personal effect on the letter.

Your handwriting should be legible and readable. Your mail isn’t going to be read if the prospect can’t understand what you’ve written. Spellings and grammar are also important. You need to be imply upon the letter that you are a serious professional real estate investor willing to offer help.

Response Rates Gets Higher!

Direct mail marketing may have a slow start at first, what with all the preparations and the waiting. Preparing the letters aren’t all that hard to do. You can always pay someone copy letters, get lists of prospects, and post the mail for you. It’s the waiting that can sometimes be worrisome.

But as time goes and as responses come, you’ll find that with every mailing you do, the response rate gets higher and higher!

On the average, on the first mailing you might be receiving around 5% to a 9% response rate. But when you get to the fourth or fifth mailing, you’ll find that your response rate has gone up to 18% and probably more!

And this is just the usual direct mail marketing you use. Now what if you add to that creative direct mail campaigns and look for more referrals? Your target list would increase for sure.

Just like other kinds of businesses, the real estate market also has its up and downs. We don’t expect every business to always be on top forever. The different niches in the real estate industry are no exception. Markets evolve and different strategies are needed in order to cope up with the changes and be on top.

The “life” of a market generally has four phases. The first phase is when right before the specific market emerges, when the market is equivalent to a fetus in a womb. It’s there and it will grow. The second phase is when the market begins to emerge, like a baby being born. At this time, the value of real estate prices begins to increase. The third phase involves the rapid depreciation of the market. It’s when the market is at its peak and is gradually being saturated. In the end, it goes into phase four, where the market is not as profitable as it was before because of saturation.

One specific question asked by many real estate investors when considering emerging markets is when to enter that specific market. It would only be natural for a real estate investor to want to enter a market and expand his or her line of niches. So when a market starts to come out, an investor would think about how to get on the boat along with the others and profit from it as well.

So when do you enter a specific market?

The ideal time to enter a market would be shortly before the second phase. It is better to be among the first to enter a market that is about to grow. Watching the trend of a market on the first phase and making likely predictions as to how the market will fare in the future will help in making the decision whether to enter the market or not.

Pay attention to the market indicators. Market indicators are important to real estate investors in such a way that it helps an investor determine whether the market is doing well or not. It tells an investor what the real estate market are pointing into.

When will you exit the market?

Of course, when you’re going to enter a market, you have got to have an exit strategy prepared. It is maintained by a lot of businesses that an entrepreneur exit a market slowly late on the third phase.

Examples of markets that are emerging profitably for real estate investors are markets for properties for airport expansion and casinos. Surveys today will show you that airports and casinos are being opened (and reopened) at lots of places. There is growth among these two markets on a nationwide basis.

Always remember to form a specific set of system or strategies when a potentially successful market emerges. Strategies used vary according to the type of market. Also pay attention to the law and tax incentives. Nowadays there are government grants provided for entrepreneurs and investors. To avail them can prove to be a wise move.

In real estate investing, it’s not unusual to have a property rehabbed. Fixing or remodeling a house has become a usual process in buying and selling properties, that every real estate investor always considers it in their system of real estate investing.

Rehabbing can be defined as the connecting thread between an investor’s buying strategies and his or her exit strategies. Rehabbing is commonly mistaken as an exit strategy, but this is not so. Rehabbing is more like shaping the deal for an exit strategy.

There are two types of rehab:

• Fixing
• Remodeling

In fixing a house, you would ideally only spend around $10,000 or less. If it exceeds that amount, it would be wise to remodel the house instead. Be efficient on your expenditures for rehab.

Poor or No System for Rehabbers

The one major problem of rehabbers is that there is not really a system to rehabbing. It is unlike real estate investing wherein there are numerous systems that you can apply to get a deal. In rehabbing, there are a lot of factors to consider that creating a unique system is difficult.

Why is it difficult?

One thing that makes it difficult for rehabbers to have a system in fixing or remodeling the house is because you have to base mostly on estimates when making an offer to the seller. There are times when there is a wide gap between real numbers and estimations.

It is also hard to remember details on specific properties. Rehabbers have to take note of every detail if they’re going for the right price.

These uncertainties increases the odds of missing important information, and it could cost you thousands of dollars. There’s a chance that you could lose a contract or make a poor deal because of bad estimates.

The General System

The general system in inspecting a house for a rehab sounds easy, actually. But in reality, it will take a practiced eye for details and a lot of effort. There is a need for diligence and double-checking.

Start with the outside first. Go around the house twice; the first round looking straight and up, the next round looking straight and down. Afterwards, do the same when checking the inside. Inspect every room twice, positioning yourself at the center. In inspecting both the outside and the inside, take note of what’s good, what’s in bad condition, and what’s missing.

In checking the inside of the house, the rooms that you have to inspect first are the following:

·        Kitchen

·        Bathrooms

·        Closets

·        Curb appeal

It’s also good to put in some add-ons to the house, and add value to the property. Check to see if you can add or change doors, windows, porch rails, and others.

In order not to forget some details, you can take pictures and make sketches of the parts of the house, too! This way, you also get to visualize how you want the house to be in the end. 

Work Your Rehab System!

While it is difficult to make your own rehab system, it is nonetheless possible to make one. It is important to work together with contractors, repairmen, and the rest of your rehab team.

Learn what you can from them. Consult with them over the estimates, the costs, and how to be efficient with both money and time. Construct time-tables and prepare price lists beforehand if you have to.

Just remember to be in control with time and money. Rehabbing will take a lot of both. Spend only enough. Spending more money is not good, of course, and spending more time will incur more expenses. Control and efficiency is definitely needed in rehabbing. 

Most of the real estate properties you’ll encounter as a beginner or experienced real estate investor will need a lot of fixing, inspection, and costs. Finding a good property wherein the expenses won’t eat you up is challenging, and you have to make certain that you buy properties that you will be able to sell.

There are four main exit strategies in real estate investing:

• Wholesale, which will give you an active income
• Retail, which will also give you an active income
• Rental, which will give you a passive income
• Private Lending, which gives you portfolio income

Other techniques in flipping or keeping the property are just that — techniques. These four are the main exit strategies that real estate investors should focus on.

In applying these exit strategies, you first have to take a look at the property you’re buying. In real estate investing, you make money when you buy a property, not when you sell.

7 Steps In Buying a Property

1. You have to first tell the world that you by houses. So start by marketing yourself as a buyer.

In marketing yourself, you will be able to get more resources in looking for leads. Do not do so much advertising on ads and newspapers. They can help but not as much as getting leads from referrals and drive-bys. Most leads are generated from contacts and networks you have. Marketing yourself as a buyer will set you in this pace.

Concentrate on getting a pool of referrals. Make a marketing business card and also prepare a professional business card as you go along marketing yourself.

2. Develop two important skills in looking for good deals:

·        Identifying distress properties

·        Identifying distress sellers

You don’t just choose any property that you lay your eyes on. You have to pick them wisely. Remember, you make money when you buy, not when you sell.

In identifying which homes to pick and get fixed, inspect them diligently and wholly. Check if you should either fix the home or have it remodeled.

In looking for the owners of the properties or houses, there are five ways to go about it:

a.)   talk to the neighbors

b.)  check tax records

c.)   check for deed records at county clerk’s office

d.)  address correction request

e.)  check the utility companies

In checking for the owners, you will recognize distress sellers when they’re going through a divorce, job loss, failed business, or anything that has rendered them unable to make payments.

3. Find motivated sellers.

Making a deal with motivated sellers makes real estate investing easy for you. In finding motivated sellers, all you really need to do is ask the seller why he or she is selling the property.

4. Do the inspection.

When doing the inspection, check every corner and every side of the house. Check first if the property is really fit to be in the neighborhood or if it’s in the right place. Then check to see if the house needs to be fixed or remodeled.

Above all, see to it that you can take care of the expenses and that you’re sure you can sell the house.

5. Present your offer quickly.

In the real estate business, it is wisest to offer your deals fast, usually within twenty-four hours. Successful real estate investors would always say to make the deal and sell the property quickly. The same goes with presenting your offer to the seller.

6. Negotiate and Escrow.

Negotiations and completing the deal are inevitable, of course. Learn to say it right and how to do it right. Get to know the seller, his reasons for selling the property, and help him attain his goal of selling it that will benefit the two of you.

7. Check the title.

Always check the documents of the property. Check the title and deed of the property. Make sure it’s clear who the owner of the property is.

Successful real estate investors have always said that the key to success in the niches of real estate is having a system. It has been proven by many. There are also others that recommend making a unique system of your own.

Beginners in the world of real estate, however, may have problems in making up their own system. They may not be able to make one by themselves. Some would then resort to following the systems set by successful real estate investors. 

But there is one way that they can cope and realize their own style in this business. The way to start this is to be an entrepreneur.

As an entrepreneur, you’ll be able to approach your business in a systematic way, even without a system of your own. The lack of a system at this stage is not that important yet, because as you grow as an entrepreneur, a system unique and applicable to you will just come up.

The entrepreneur approach is almost the same in every business. The first thing you always have to consider in doing business is thinking of what your client really wants. First hear out what your client says he wants, and then think about what he really really wants.

For example, a client of yours is asking for advice to get more sales. So you start to think: getting more sales would mean a new and great advertising strategy. But as you look deeper into it, your client really wants his company to grow, through new advertising and more sales. And when the company grows, your client will be able liberate himself/herself through an exit strategy, having more money and living life more.

In knowing what your client wants, you’ll be able to make solutions for them which can help both of you set up your own systems in time.

The Four Personalities

An entrepreneur is four people in one. He or she has four personalities in him or her.

• The entrepreneur is a dreamer.

An entrepreneur is a dreamer, and he dreams big. He dreams of a great company that is going to be successful. He dreams up great strategies that might be impossible but improbable. He dreams of a lot of big things. These dreams will be his sketch of what to accomplish in the future. Without dreams, there will be o vision… and it might very well become a boring world.

• The entrepreneur is a thinker.

Naturally, he who thinks moves one more step forward. As the entrepreneur dreams, he starts to think if this dream was possible in anyway. With this, he will ultimately create a vision of what he could accomplish, and will accomplish.

• The entrepreneur is a storyteller.

A storyteller would tell his story in complete detail, and he very much finishes the story. An entrepreneur is the same. The entrepreneur thinks of every detail and every step that he has to take in order to reach the ending. The ending for an entrepreneur, of course, would be a successfully attained goal!

• The entrepreneur is a leader.

The entrepreneur is a leader, wherein he has a mission in life and he can lead others along with it. An entrepreneur strives on towards his goals, leading his staff along that road and working with them to fulfill it.

In real estate, an investor has to be a real entrepreneur… in the real sense of it. It’s not just about knowing what an entrepreneur does, or how he gets a deal. It’s about becoming one, being one.

In the real estate business, it is important for us to have multiply exit strategies after investing in a real estate deal. Lease options and subject to deals are two of the most commonly used exit strategies that real estate investors use.

The Difference Between a Lease Option and a Subject To

The difference between a lease option and a subject to mainly lies on the ownership. With a lease option, you as the investor have a right to control the property without owning it. With a subject to, however, you get the deed to the property. This means that not only do you have control over it, you also have ownership.

The main key point in choosing between the two strategies is in determining the seller’s financial status. In choosing to lease option a property, you have to make sure that the seller or property is not in financial distress. The seller must not have any bad debts on him.

In a subject to, however, a seller or property in distress can be considered. On reason why you’re getting the deed to the property is so that the seller with a bad debt won’t screw up the deal. Of course, in a subject to deal, the property does not necessarily have to be in financial trouble. You can also do a subject to with sellers and properties that are in good condition.

Sellers and Buyers of Lease Options or Subject Tos

Real estate investors know that the lease option market gains more profit than rehab and is worth five to ten times more than retail. But putting aside the benefits a real estate investor can get, the real goal of every real estate deal should be a win-win-win situation, wherein you’re not the only one who ends up happy with the deal. The win-win-win type of deal also gives sellers and buyers benefits for selling or buying the property.

So what motivates sellers to go for a lease option or a subject to? The main reason is to have debt relief. They will be cleared of their debt, whether good or bad. In the case of a lease option, only those of good debts are considered. Other reasons could include new events in theirs lives — marriage, divorce, job transfer, or losing a job, etc. The bottom line is that the sellers will get to go on with their lives and stop worrying about their debts and their property.

As for the buyers, they will always be in a win-win-win situation. This is especially because or the riding market of real estate lease options and subject tos. Buyers need real estate investors. The country is full of people with bad or poor credit, and they are ready to buy lease options or subject tos.

System For Lease Options and Subject Tos

Having a system has been consistently advised by many successful real estate investors to their colleagues. Negotiating lease options and subject tos require no less if you want to make it big.

The first step is getting a deal. In getting a good deal, you have to first generate possible leads. One of the best ways to get leads and, in the process, get a deal is to find a good realtor to work with.

Realtors actually control about 80 to 90 percent of the market. They also have what you would want when looking for good properties — a sellers list. What’s more is that they realtors tend to know a lot about the sellers and issues concerning the sellers (divorce, financial trouble, marriage, etc.).

You can find realtors in many ways. Start first with a realtor you know. Then ask for his or her network of realtors and go from there. You can make letters or presentations with them. The one thing you have to remember to gain a realtor’s connection is to explain how you can help them in return for getting their sellers list.

If you help the realtor, and you help the seller, then you get the deal.

Your customers are an essential part of your business. It is they that will determine the success, or the failure, of your business. You business will eventually reach its peak when you’ve got customers who repeatedly avail of your products and services. But without customers, your company might go down the drain.

In garnering customers and getting them to choose you and your products and services, there is one thing that every management has to focus and improve on. Customer service is becoming more and more important when it comes to management and selling. It affects your customers’ view of your business and how you run it, and it will therefore determine if the way you and your employees carry out your business is worth their time and money.

About 80% of customers go somewhere else because of poor and indifferent customer service. The average American business loses about 20% of its customer base each year due to poor customer service.

Many companies employ a unique selling proposition to generate more customers. But nowadays, it’s not easy to have a selling proposition that is unique enough for the company to get more customers.

This is why businesses nowadays choose to employ a selling proposition that has the biggest chance of generating repeat customers, and that is none other than a great and make-you-happy customer service! It may not be unique, but it will make you one of the few companies that a customer would prefer to go back to.

Of course, you would also have to be the company that provides a customer’s needs. You would also have to be a company that can be relied on and delivers on time always. Delivering the best of what a customer wants is part of a great customer service.

Great customer service begins in the management itself. You have to manage your employees in a way that you are also giving them great customer service. You also need to see to it that your employees also treat each other the same way. Giving great service to each other will help you and your employees deliver on time and doing things right. As a result, problems regarding execution of tasks are minimal. By treating them as customers and giving them great service, they will be able to go about their tasks on time and with little mistakes.

The same thing goes to your company’s suppliers, retailers, and other business associates. They are in a way your customers — customers to your business. Therefore, giving great customer service to them will get them to work with you more. The effect of this is that they will produce results and deliver to you on time as planned as well. This will increase efficiency in your management and business.

Great customer service also gives your company what it needs the most to be successful in the industry — repeat customers. When a customer is very appreciative and is very satisfied with how you have guided him or her in her purchases and orders, he or she will surely come back again for your assistance.

Remember that it is never okay to give anything less than appreciative service to a customer. Remember, too, that happy customers will come back to you!