If you haven’t read my previous post about “4 Pieces of Advice for REI Newbies”. I highly encourage you to do so because I’ve mentioned that real estate investing is all a numbers game and the more effort you put in the better your results are. Now if you have followed my advice previously and want to take things up a notch you’re at the right place.
I am sure by now we all know the sales funnel:
LEADS > DEALS > PROFIT!
This is true and it applies to almost every business, but let’s look at a few strategies that you can use to improve your cost per lead ratio as low as possible. The first strategy we will look at is the “Shotgun” vs. “Targeted” approach for getting motivated sellers.
Finding motivated sellers with the ‘Shotgun” approach
How “shotgun” approach work is that it involves buying a list of several zip codes and mailing to everyone on the list in order to find potential motivated sellers. This approach can be really useful if you’re new to this industry and looking to reach more people.
Now let’s discuss about the cons of using this approach, it is impossible to tailor a message to all audience with this approach. The reason why I said so is because you’ll never know–and it is important to understand that within this group of people you email each of them belong in a different group and will respond to different messages based on their interest.
Instead, use a more “targeted” approach
By using this approach you’ll save a lot of time and resources because delivering a tailored message specifically for a particular group you are targeting directly and addressing their situation, which is good for you.
Nowadays it’s easier for you to get the list of people in foreclosure because it’s publicly recorded, and there are probably people in your area who compile a fresh list every week and will sell you that list for a cheap rate. Once you’ve gotten your list, the next thing you need to work on is your message for each list that you have. There are many kinds of targeted lists you can get from Realtors. As you gain experience in real estate investing, you will get to know reputable list brokers who can obtain different kind of list you want to market to, and from there you can start creating marketing pieces directly to that group and greatly improve your open rate.
From my experience, it’s going to take some time for you to get a hold of this. After a while, you will be able to reasonably predict a response rate to your marketing campaigns. Do not be discourage if your response rate are low at first, it happens to everyone including myself. I hope that with this simple and effective strategy will help you see a clearer picture in the real estate investing industry.