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...
I don’t know about you, but I think real estate has been really boring this summer.
I don’t mean in terms of activity, because there’s been a lot of that. Lots of leads. Lots of calls. Lots of deals.
And lots of competition.
What has surprised me the most, though, is just how many people are now doing this real estate investing thing.
I don’t attend real estate meetings very often, but when I did a couple of weeks ago I was shocked by the turnout. The place was absolutely packed – there were like 85 people attending a meeting that two years ago was only drawing 15 or maybe 20 max.
And most of the attendees were new folks who have yet to do a deal.
That’s not a bad thing – in fact I think it’s a good thing that new folks know enough to get out and meet others with similar interests. And it gives them a chance to talk to more experienced people and learn from them.
I had a chance to talk to several of the new people at that meeting. They were good people and good conversations, but the interesting thing was that I noticed a common thread ran through pretty much all of them:
The lack of repetition.
I wasn’t terribly surprised by this, since it took me a while to figure it out when I got started.
And over the years, I have come to believe that repetition in real estate investing has been one of the primary drivers for my success.
So I thought it would be worthwhile to run through a couple of areas where repetition has made a difference for me.
Marketing Focus
The first area is marketing focus.
By this I mean what you’re doing to identify and attract motivated sellers.
I find that too many new folks jump from one thing to another way too quickly, before they can figure out if a particular strategy is working.
It can be bandit signs, it can be direct mail, it can be PPC, or pretty much anything else...
There are a ton of different ways to market for sellers, but the important thing, from my perspective, is to stick with whatever you choose to do for a long enough period of time to discover that it works – or that it doesn’t.
Let me give you an example...
Several of the new folks decided to start by doing decent-sized mailings to absentee owners. They started with mailings in the 3,000-5,000 postcard range.
They all received lots of calls from their mailings, but not one of them got a deal out of it.
So what did they do?
Every one of them decided that the absentee owner list was a “bad” list and stopped mailing to it. And went on to try something else.
Now I don’t care what list you mail to – pre-foreclosures, divorces, probates, absentee owners… whatever. A single mailing to a small proportion of the available leads is not nearly enough to tell you if a list is good or bad.
Why?
Because there are so many variables in play when you market that it takes mailing to a list multiple times to understand if it has any value.
So when you pick a marketing strategy – repeat it enough to get a feel for it before jumping to something else.
Marketing Activity
This is another area where repetition is huge. And where a lot of new folks stumble because of the workload.
If you’ve read much of my stuff, you know I’m primarily a direct mailer, and that I’ve been mailing since 2004.
But what you probably don’t know is that since I changed my focus to wholesaling a few years ago, I’ve mailed consistently for 170 straight weeks. And I mean every single week for 170 straight weeks. Including this week, when I mailed a little over 800 pieces.
There is no doubt in my mind that this sort of dogged repetition, while boring, is a huge driver for success.
And it’s not just direct mail…
Do you prefer bandit signs?
Great! Then make sure you’re getting your signs up every single week. Week in and week out, without fail.
Now the code enforcement people aren’t going to like you very much, but when sellers see your signs up consistently, guess what? They’re more likely to call you than they’d be if they only see your stuff once in a while at random.
There’s another benefit to repetition with respect to your marketing other than your prospective customers seeing you a lot…
The more you repeat it, the better you get. And the better you get, the less competition matters.
Follow Up
The third area when you should get good at repetition is with your follow-up.
I was talking to one of my mentorship students in another market this week. He was telling me about a deal he did recently…
He’s a personable guy, and he got to talking with the seller and had her warmed up to the point where he could ask questions about the marketing pieces she had received and why he got the deal.
It was a probate situation, and she told him that after the notice was published, she had been “bombarded” with mailings from 25 different people.
Apparently, she had faced a whole bunch of issues with the estate and, therefore, didn’t get around to dealing with the house in the estate until a little over 3 months after the notice was published.
And she called my student – who got the deal – because out of the 25 people who had mailed to her initially – he was the only one who had bothered to send a second mailing.
Trust me when I tell you that repetition in your direct mail follow-up is critical to being successful with it.
And it’s not just direct mail – you need to be savage in your follow-up no matter what marketing strategy you pick.
If you’re just getting started or if you’ve been doing this a while and aren’t seeing the success you’re looking for, then look for areas where you could improve your repetition.
It could be just the change you need to make to get to the level you’re looking for.
What Say You
Agree with me about the importance of repetition? Tell me why below.