When I say the term “real estate investing”, what do you think of?
Go ahead – take a second to think about it right now.
For most people, that term conjures thoughts of landlords fighting with bad tenants – or images of doing fixer-upper projects on old houses. You might even think about buying foreclosure properties as they’re auctioned from the courthouse steps. And of course, you think of the late-night infomercials that promise to teach you to buy property with no money down.
All of those topics are a part of real estate investing, and you’ll probably choose to study one or more of them very closely.
But the undeniable fact is this:
Truly successful real estate investors focus on people more than they focus on real estate. The professionals know that nobody makes any money until a problem is solved, so they spend their time seeking out people with real estate problems and only then do they use their real estate knowledge to create profits.
What do real estate “wanna-be’s” do? They spend all of their time reading the latest manual or studying courses, but they spend virtually no time trying to find the people who would benefit from their skills. Newbies focus on “strategy”, not on “people” or “circumstances”.
The simple fact is this: Newbies think that their knowledge of the “latest greatest” real estate strategies will translate directly into profit. But the most successful investors know that profit is created only when Opportunity meets Specialized Knowledge.
So how do the pro’s find these opportunities for profit? Let’s take a look at that right now.
Fatal Flaw #1: Newbies Don’t Know How Or Where To Find Great Opportunities For Real Estate Deals
For the first 6 months of my experience as a real estate entrepreneur, I was a dismal failure. I spent a lot of time reading books and listening to tapes about creative real estate strategies, but I made no money at all. Not a penny.
Not only did I fail to make money. I actually lost money because of terrible tenants. That was painful beyond belief, but I brought it on myself because I focused exclusively on being a master of real estate strategies, rather than a master of finding people whose circumstances matched my knowledge.
But then, as if by magic, things began to happen for me. Deals started to appear that I’d never seen before. Finding the fabled “motivated seller” was suddenly much easier than in the past. And that led to deals where I actually made real, spendable cash. It was truly amazing!
What was the difference?
Instead of focusing on learning every detail of the technical strategies of creative real estate investing, I began to focus on finding great deals through some simple marketing strategies. Marketing is the process of reducing down the entire population of the world into a small subset of people with whom you can do business.
Marketing requires you to answer these questions:
1. Who is your “ideal” prospect? If you’re trying find a great deal, your ideal prospect would have certain characteristics, such as:
- The prospect is a home owner
- The prospect is “motivated” to sell their property
- The home is in a certain geographic area
- The home is in a certain price range
- The home is in (excellent, good, fair, poor) condition
There are a lot more variables to fully defining your ideal prospect, and you might even have different ideal prospects depending on which strategies you’re using. But the point is simple: You must know who you want to do business with.
Example – “My ideal prospect is a home owner who is motivated to sell their property as soon as possible. The home should be in average or better condition and should be located in the 30281 zip code. The home’s value should be in the range of $100,000 to $195,000.”
2. What are you going to offer to your prospect that will motivate him/her to do business with you?
Another way to state this is: What is your “message”? What is the reason you’ll offer for someone to do business with you?
Your message must be simple and should convey a very clear benefit to your prospect. Some of the most commonly used “messages” among real estate entrepreneurs are:
- I Buy Houses
- Sell Your House in X Days
- Fast Cash For Your Home
- Stop Foreclosure
- Cash For Homes
Important Note: These are all very common marketing messages, but not all of them are particularly good messages.
Here’s a Better Example – “I offer immediate debt relief to home owners by buying houses in 7 days or less.”
3. How will you physically communicate your message to your ideal prospect?
Will you use
- Classified Ads
- Road-side sign
- Direct Mail
- The Internet
The list of available communications media is literally endless. Your job is to use a few (not just one!) of those types of media to communicate your message to your ideal prospect.
To summarize – marketing means that you’re communicating a desirable message to a suitable prospect, at a time when that prospect needs what you’re offering.
Why is marketing so important?
Isn’t it true that all home-buying strategies are totally worthless unless you’ve got a relationship with a home owner who is willing to sell using your strategy?
And isn’t it true that unless you have a qualified buyer, it doesn’t matter if you know 70 different ways to sell a house – you still won’t sell your house? Of course that’s true.
That’s why marketing is so important…and why most new real estate investors fail so miserably. Instead of focusing on the people that they can help, they focus on the technical strategies that they’ll use.
And here’s the hard truth of the matter: Nobody cares about how great your strategies are. All that people care about is what you can do to help them.
So your job is to:
- Identify your ideal prospect
- Create an offer that motivates your prospect to do business with you
- Make your prospect aware of your offer
Important note: That was a very short discussion of marketing and prospecting, both of which are very big topics. We’ll discuss these topics next, so stay tuned!