Simply the best way to consistently make a nice tidy profit in real estate any day. It was popular to take over payments subject to the underlying liens and mortgages but today not so hot, although this is coming back. Used to be we could just take over distressed owner’s property subject to existing financing and evaluating how much cash it would take to pay off owner’s equity and/or bring existing financing current. It was and still is a matter of offering debt relief. Often times you could make these properties cash flow. You recouped your money by putting in the right tenant/buyer on a lease option. Now more than ever pre foreclosures with over-leveraged properties are plentiful in the market place and small investors new and experienced are finding that this is the key to making your real estate business even more profitable. If you haven’t signed up for a pre-foreclosure listing service, now’s the time, it’s not a good use of your time to hunt for these on your own. Getting access to timely information and correctly implementing your marketing plan to reach distressed leads is a technique that you could literally live very well from.
How to Turn That Pre-foreclosure Lead into Big Money
It all depends on your game-plan of how you want your real estate business to be. You should use the right vehicle to get your message to your target distressed market. By the end of this article I hope to show you how you can effectively market to your target audience and turn your leads into profits. So how do you get your phone to ring off the hook with people dying to do business with you? In my opinion direct mail still works and is your best technique to reaching the distressed seller. I know there are other effective ways to get into direct contact with the distressed owner…like online marketing, however……..
Door Knocking, Delivering Flyers
I have investor friends who swears by this and says it is their best weapon. They forego any kind of mailing and simply show up at the door to talk people into selling. I don’t know about you, but I wouldn’t be up to talking to anybody coming to my door talking about my foreclosure. I just wouldn’t admit to a stranger at my door that I’m in foreclosure – heck I wouldn’t even open the door…. I view this kind of marketing as harassment! You can come but doesn’t mean they’ll answer the door. I find this too time consuming and exhausting.
I used to however, visit the neighborhood and leave flyers on the doors or on cars parked in the drive way. Do not leave anything in their mailbox unless you put a stamp on it, the mailbox is for the post office to use only.
Online advertising for leads
I found that these leads were not as serious as those I contacted. First it’s not every lead I wanted. Picking the leads you want is a much better approach that way you work in the areas you want. Direct mail is the best approach I’ve found works best for getting preforeclosure leads to call me.
It’s not worth your while at this point to spend that much time on lender, mortgage and loan information now, instead Pay attention to the type of property and the area rather than all the other information. Often times that’s erroneous information anyway and you get all that from the owner once you begin to work with them. For now, all you want is a motivated seller to call you. Yes, there is some competition contacting preforeclosures but you can distinguish yourself from other investors by using some creativity. My idea of creativity is by using interesting mail, frequency and a combination of marketing messages and offer. Depending on which point to start your direct mail (NOD or closer to NOS) you should send at least 3 letters and 3 post cards.
Here’s my basic approach, I mail a total of two letters and two postcards. They get alternating letter/postcard each week. My message is incremental in style. Normally I don’t get any response within the first couple of weeks. Hey, all it takes is one deal to make it all worth while. Just to give you an idea, here’s an example of what it looks like.
First Week: Send Letter#1
Second Week: Send Postcard #1
Third Week: Letter #2
Fourth Week : Postcard #2
On the outside of your envelopes stamp the words “I WANT TO BUY YOUR HOUSE” Perhaps the best ideas will come from your own imagination and creativity. Just put yourself in the seller’s shoes and work from that.
All things are relative to the time of the pre-foreclosure information once you receive it but here is my game-plan that pays dividends for me month after month. My basic approach is mailing to the individual in pre-foreclosure with a total of two letters and two postcards. The seller will receive an alternating letter/postcard each week until all are mailed. The vast majority of leads I will hear absolutely nothing back from, but it just takes one deal to make it all worthwhile.
My message is alternating and “incremental” in style. I’ll list here the body/text of the letters and postcards to give you an idea. Make no doubt that you can tweak your message in many different ways but here are just some examples for you to think about:
———————————————————————
Letter #1 (Week #1)
Do you need to sell your house and F-A-S-T! I buy houses that others simply won’t consider because of one reason: I Get Personally Involved. Others just don’t take the time to listen how to meet your needs because everyone’s situation is unique from the next person.
I am an investor and do expect to make a profit so if you need all cash and retail value for your house, then simply do not call me. However, if you have some flexibility and need a resolution quickly so you can quit putting your entire life on hold then give me a call. No obligation, fees, commissions. I just want to buy your house!
Postcard #2 (Week #2)
If you are looking for someone to possibly buy your house, then don’t call me! However, if you want to already consider your house sold, then start packing your bags so you can get on with your life. There is a variety of ways I can buy your house and it doesn’t have to be a complicated process. In fact I can close in little as 48 hours or as long as……..you name when! Give me a call and I’ll explain in plain English how the solution to your problems is a phone call away.
Letter #2 (Week #3)
Life can bring on many circumstances to deal with and unfortunately some of those are not pleasant to work through. Selling your house can be the exact type stress you need relief from and that is what I specialize in. I buy houses no matter what the situation so people can simply make a difficult decision easy, and just move on in life.
If no obligations, fees, or commissions has an appeal to you then give me a call. I would be happy to meet with you face-to-face and discuss the opportunities available to you so I can buy your house. I hope to hear from you soon.
Postcard #2 (Week #4)
Well, I can certainly understand if you do not want to sell that property for now. There may come a time down the line that you may decide to do something with it. I would only ask that you keep this card and that way you can give me a call when you’re ready. Thanks for taking the time to listen to my offer to purchase just in case you know where to reach me if you decide to sell. Don’t hesitate to give me a call if you have any questions and I do hope to hear back from you soon.
———————————————————————
You can see by the above listed examples that my message is incremental and differing in nature. It’s just rare for the pre-foreclosure seller to call you on that first letter or postcard. You just have to put yourself in the “shoes” of the seller and know that if they are in pre-foreclosure then they are probably getting a LOT of mail from creditors. The possibility of the pre-foreclosure seller throwing some or all of your direct mail away is a given! Just know that now and expect it. However, all it takes is one phone call and one deal to see your next big payday dealing in pre-foreclosures.
A Couple of Points in Wrapping Up Here:
On all your letters, stamp on the outside in red ink, “I Want To Buy This House!”. You can buy stamps like this at Office Depot or Staples costing you about $25. You write in the script you want and mail it to them with the custom stamp coming back to you in a couple of weeks. Before that potential foreclosure seller throws away your letter, they will at least read that red stamped message on the outside. I can’t tell you how many people have commented to me on that one technique was the reason they took the time to open my letter and thus called me.
