Editor’s Note: Dennis Fassett is a former corporate finance executive turned real estate investing “Cash Flow Mercenary.” Dennis specializes in single-family and multi-family cash flow properties and thoroughly enjoys assisting his fellow investors with their own strategies, including how to buy your first apartment building.
As an ongoing contributor to Mogul’s “Market News Updates,” Mr. Fassett provides us with his own unique, lively, and thought-provoking commentary on the timely industry news and events of today that are impacting our industry. And be sure to check out his other super-helpful Market News Updates. For now, enjoy...
From Dennis Fassett, Cash Flow Mercenary...
In my last post, I talked about my own transformation from rock-headed finance guy to marketer.
This week I want to talk to you about the top 2 things to key in on while you’re working to become a good marketer.
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Focus
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Traction
Out of the gate most new investors start throwing a bunch of stuff against the wall to see what sticks.
On the surface it appears to make sense and be a prudent course of action...
But what I’ve seen happen – far too often – is that a new investor will send out a big mailing, or put out a couple hundred bandit signs, or spend some money on a fancy website… and not see any success.
So they’ll abandon what they were doing and go on to try something else.
That’s exactly the wrong approach.
Why?
Because any marketing approach that you try needs to have time to get some traction.
Let me give you an example…
Of the 4 marketing approaches that I use, my primary focus is direct mail. And within the direct mail space, I focus heavily on probates.
I have a system that works well in my local market, and a while back I decided that – rather than learn how to mail to different lists in my local market – I would attempt to copy what I was doing in my local market to other markets around the country.
What I learned was surprising: It can take a number of weeks to get traction in a market.
It was surprising because I contact a completely new batch of people each week. And so the people I mail to this week have absolutely no relationship with the people I mailed to last week.
In one of those markets, my business has grown to be about 50% of the size of my local market.
Yet it took 6 weeks before I got my first calls. So had I quit after any of the first 5 mailings, I would have left a ton of money on the table for someone else to scoop up.
It was a forehead slapper for sure.
The cool things is, now that I know it takes time to get traction, whenever I try a new market I plan out my marketing for a set number of weeks. And while I, of course, am concerned with the results, I don’t even think of quitting until I’ve made the last mailing.
Then I can make an educated, data-driven decision to exit a market. Which is exactly what I have done in 3 of the markets I’ve tried.
Doesn’t that make sense?
The best part about this approach is that takes all the emotion and worry out of a campaign. Because it becomes all about the data and results over a relevant period of time.
This goes for any type of marketing you try:
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Direct Mail
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Bandit Signs
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Bird Dogs
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Facebook Ads
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Whatever
Doing something once and abandoning it is never the right option.
The second point that I want to drive home is focus…
I don’t know anyone who has an unlimited marketing budget. So my strong recommendation when you’re getting started is to focus on 1 marketing approach at a time.
So you can really focus on it.
I broke my own rule on this at the beginning of the year, and I’m still trying to dig myself out.
The first weekend in January, I added 2 new marketing approaches to what I was doing. I expected each to take some time to percolate and get traction.
But instead, they both took off and started generating a good number of leads. One was producing about a dozen a week, and the other was throwing off 6-8 new leads per week.
Either one I could have handled fine. But both together buried me because I wasn’t prepared.
I know you’re probably thinking that it would be a good problem to have, but it’s not…
I have such a big backlog that I still haven’t been able to contact almost 30% of the leads from the source that’s generating a dozen per week. So those folks are probably going to work with someone else.
So you can see how my lack of focus is leaving money on the table for someone else.
My advice is to focus on 1 thing until you get traction with it, or until you don’t. Then you can move on to something else.
Talk to Me
Do you have your own stories about focus and traction that could help fellow investors? Share below.
Dennis Fassett
earned a BS in Economics and followed that up with an MBA in finance. After working and corporate finance and banking for several years, he started buying single family houses, and quickly built a very nice portfolio of cash flowing rentals. When the credit markets started to dry up and he couldn’t get any additional single family mortgages he shifted his focus to apartment buildings. He now has over $3 million in rental real estate. He manages most of it his self and still has a day job. Dennis has even created his own Private Equity fund to buy apartment buildings.