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 LOVE that quote by Dale Earnhardt. It has grown to become a mantra in my house.
I started saying that to the kids when they were fairly young. Sure, we celebrated their successes and great finishes in sports and in school, but we always looked at what they had done, if they hadn’t won the spelling bee or the game or whatever, to see what they could have done better in order to WIN.
Harsh?
Perhaps. Especially in this day and age when they don’t keep score at kid’s games and everyone gets a trophy just for participating.
But it’s life. Plain and simple.
And you can say it a million different ways – you don’t get points for second place; nobody remembers who finished second; and so on.
Because it’s true.
So then, please tell me why so many real estate investors DO NOT get this.
If you’ve read my stuff, you probably know that I chase probates, and that I’ve been mailing to them consistently now for over 14 years.
I’ve gotten pretty good at the whole thing. The first mailing piece, the follow up, talking to sellers, building rapport and trust, etc., etc., etc.
So I get to talk to a lot of probate sellers.
And when I do, I always ask about the mail they’ve gotten from other investors looking to buy their estate property.
I talked to a lady last week who had a property in a decent but not great area.
The crazy thing is, it turns out she had received 29 pieces of mail. From 29 different investors.
And that was just up to the time when she called me.
And when I asked her what she had received, her reply was, and I quote, “A bunch of postcards that were all the same and a bunch of letters that were all the same.”
Now I don’t know a single real estate investor who wakes up in the morning and runs around with his or her arms in the air yelling, “We’re Number 29, We’re Number 29!”
But while they may not be doing that overtly, their actions are dooming them to that fate.
Why?
1 Reason. We’re cheap!
Face it, and I include myself in this group, we’re tighter than two coats of paint. We don’t want to spend any money, and so we try to get stuff that’s free.
And that, unfortunately, includes the marketing materials that most investors use when they send direct mail.
It’s so common that when new folks approach me and ask my advice on why their marketing is not generating any results, I already know the answer.
They found whatever they were sending on the internet. For free. Every. Single. Time.
And they don’t even think that someone else in their market, who’s mailing to the same list, may be sending the exact same letter or card. Because it was free.
The second thing I ask is what list they’re mailing to. They tell me. And I ask why they chose that list…
And 9 times out of 10 the answer is, “Because it was the cheapest one.”
In real estate investing, when it comes to marketing, cheap or free are the worst possible choices you could make.
Because if something is free or cheap, a ton of other people will be using it. And it completely obliterates the message you’re trying to send to sellers.
And what do you think happens to all of those “same postcards and letters” that sellers get?
They pretty much always end up in the trash. That’s what the 29-pieces-of-mail-lady told me she did with them. She saved 2 – mine and the one from my main competitor. Because they were different from the rest.
The Solution
I’ll bet it would surprise you to learn that I had all of my marketing pieces worked on by a professional high-end copywriter. And paid a bunch of money for the privilege.
Because I wanted to make sure they were better than good – and that they weren’t anything like what anyone else was sending.
It may also surprise you that I bought a custom data source that was hella-HELLA-expensive.
And to be honest, I wish it had cost MORE. Not less.
Because I knew that the higher the price, the fewer people would be mailing to it.
And guess what?
The first marketing piece that I had work done on paid for itself with the very first mailing.
And the first mailing to the custom list did too. And then some.
The short answer is that right now, with these market conditions and this level of competition, it’s not quantity that counts.
Because there are some mega HUGE operators out there in pretty much every market who are carpet bombing entire areas with their stuff, month in and month out.
How can you compete with that?
In most cases, you can’t. Because there’s always someone bigger with more money who can by sheer brute force make your message invisible. Or someone like me who sends something different, which makes the free stuff pale in comparison.
So…
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Get small.
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Pick out targeted or niche lists that can’t easily be scaled.
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Create your OWN marketing materials to send to them.
If you’ve been frustrated by your marketing results so far, I think you’ll be pleased with the results. IF you put the time and money into it.
Oh and my kids?
Rather than wilting under the pressure of performance and high expectations, they’ve internalized this concept. And they have grown to realize that anything that’s worth doing, is worth doing very, very well.
And the proof is in the pudding...
My oldest was captain of her softball team in high school. My second oldest was captain of her lacrosse team. My son was captain of his state championship swim team and earned nearly a full ride for academics to college, and my youngest will be captain of her swim team when she starts her senior year in the fall, and is already looking at offers to swim on scholarship in college.
All because they know instinctively that second place is just the first loser.
Don’t be #29. Be different.
How are you different?
Share with us in the comments section below.