subject: Marketing for Real Estate Tips [print this page] Marketing for Real Estate Tips Marketing for Real Estate Tips
The 6 M's of marketing (using foreclosure prospects):
1) Market--the recipients: Owners of single-family homes who have a Notice of Election and Demand (NED) filed in public record. This list normally works well in emerging, flat, or declining markets. By far, the market is the most important of the six M's.
2) Message (what's in it for the recipient): Basically this needs to be a document that is personalized to the homeowner and conveys to them "What's in it for me." This message is targeted to highly motivated homeowners in distress, expressing an interest in buying their property quickly and easily, at a fair price, and on the date of their choice.
3) Media (what type of mailer, contact): These can range from postcards to letters, from a FedEx package to lumpy mail. Personalized postcards and personalized letters normally work best for this market. Also note that a postcard with a one percent response rate will cost about $0.37 each, versus a letter at about $1.25 each. This means that a letter requires about a three percent response rate to match the effectiveness of the postcard.
4) Multiple: Research indicates that several instances of contact, as opposed to a single contact, make a huge difference in the response rate. This market should be contacted approximately 5-8 times during the foreclosure period.
5) Months: In Colorado, the foreclosure period (from NED filing to auction) is approximately 110-120 days. Therefore the mail campaign would span about 4 months.
6) Money: This is the amount of money investors should expect to spend over the campaign. Investors should track the number of pieces at whatever cost it takes to generate a phone call. Next, they need to know how many phone calls it takes to get a profitable deal.
The key point is to understand that we have to be ever more diligent on calculating the offer. Note, formulas used to calculate offers on long-term hold real estate are not at all related to fix and flip formulas, and these deals are normally disastrous for the unsuspecting investor.
We talk much more about this in the What2offer mentoring program. After years of doing these calculations by hand, my partner and I have developed an online real estate software to make our lives much easier. We can now crank out offers and determine the exit strategy in seconds.
As a foreclosure investor, I have built many web sites over the years. Unfortunately, most of these sites are now affectionately called "brochure sites."
This lovely name refers to the fact that visitors just "look around," and therefore a customer base is not readily established and the conversion from a visitor to sale of a product (e.g., foreclosure property) or service is almost impossible. I wanted homeowners facing foreclosure to contact me as well as investors looking to buy properties at pre-negotiated short sale prices to contact me.
I realized I was missing the big opportunities of Internet driven marketing campaigns. I am already good at direct marketing campaigns, door knocking campaigns, and sticky-note campaigns, but my Internet marketing transactions were minimal.
The idea behind Web 2.0 technology is based on at least three principles. First, is the usage of the proper key words that are normally searched for, using the big Internet search engines. Second, is the integration of the social networking platforms, including blogs, videos, tweets, etc. This provides for an excellent way to keep in contact with your customer base. Third, is a mechanism that can be used to develop a database of such to keep track of all of your customers.
