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Top 5 Ways We're Getting Deals Right Now

JD Esajian | Investing Strategies > Selling
" Hey Moguls, it’s me again – JD Esajian. I was just wondering if anyone else is sick of hearing: “There aren’t enough deals out there.” “It’s just too competitive.” “Even the MLS is dead.” If so, I just want you to recognize it as BS. Yep, I said it. Whoever says those things is just not doing some things right. We always have 5-12 different marketing campaigns at any given time. Right now, we have 5 that are performing like crazy and I’m going to share them with you. #1 The Online/Lead Generation Combo Nowadays, thanks to the internet, it’s amazing what you can accomplish when it comes to marketing... On our core website, we have various squeeze pages set-up. These pages are content-specific sites for individual leads (such as direct sellers, pre-foreclosures, foreclosures, and so on) that are attached to our main website, which is connected to or database (that collects all the lead information). We also invest in what’s called a PPC campaign. This is a paperclip on the internet that you actually pay to generate leads online. It works by generating keyword specific advertisements, like on Google for example. So those ads that you see on Google, if you click on them, someone paid for it. If you are good at marketing with PPC, you can generate a great deal of leads. #2 The MLS Believe me, there are plenty of deals on the MLS. We also market fairly heavy for deals on the MLS for leads that become active or get listed that day or that are pending. With properties that are pending, that deal has not gone through or is contingent on something. If someone fails to do their job and that deal falls through, and you didn’t submit a back-up offer, you are out of the game. Another is expired listings. There are reasons that it expired. Maybe that seller wasn’t motivated, or the agent wasn’t any good, or the seller changed their mind. Contact them or contact their listing agent when you see that it has expired and put a deal together. Maybe you can be a problem solver when putting that deal together. #3 Bandit Signs We've always done bandit signs historically. I will be honest with you… at some point in your investing career, many of you will slow down on one of your successful business campaigns for various reasons. That happened recently with bandit signs and my business. We pulled back, and for a couple of months we did not put out or bandit signs consistently. We realized this mistake, and at the start of the year we started using our bandit signs consistently again. I’m telling you, our phone has been ringing off the hook since we started focusing on them full force. #4 Direct Mail Most of you are really familiar with this one. You target motivated sellers and send letters to them. Here are the basics… One of the biggest mistakes that investors make is to send out just a few mailings and then call it quits. These are called “campaigns” for a reason. It’s very important to understand that your response rates will go up with subsequent mailings. Some people will look at your mail piece for a year or more before they call you. You want to be the one that is still mailing to these folks when they finally become motivated. Remember that time and circumstances change things. This is especially true for absentee owners. An interesting study a few years ago resulted in some impressive statistics for response rates. The number of deals derived from direct mail campaigns look something like this: After the 1st Contact: 2% After the 2nd Contact: 4% After the 3rd Contact: 6% After the 4th Contact: 10% After the 5th Contact: 81% (Yep, that stat is correct…but there’s even more mind-blowing and helpful stats…) The study went on to say that 90% of the people gave up after the 3rd contact. If you want to be one of the 10% who sticks it out and closes 81% of the deals, you must have a system for doing this. Without some type of system, it will never get done. Before you can send a letter, you need to come up with a list of sellers. You can come up with a list using your own detective work or you can purchase a list through places like listsource.com. Your local PVA or tax assessor’s office may have an accurate list available. #5 Door Knocking This is just as it sounds – actually physically knocking on someone’s door. Try to target homeowners in foreclosure, about 30 days or less until their auction date so you know you are dealing with a highly motivated seller. Even if they aren’t interested, ask them if they know someone who might be. The worst that usually happens is that someone may be rude, but usually people are extremely friendly. And they love to talk and gossip about their neighbors… like who they heard is getting a divorce, or someone might be getting ready to sell, or somebody is having financial difficulty and possibly facing foreclosure. All useful information for you, Mr. Detective/Investor. Market, Message, Media Market, Message, Media – the who, what, and how of marketing – comes from the Godfather of Marketing, Dan Kennedy. Make sure you are targeting the right people, using the right message, the right way. Market = Who are you marketing to? What type of lead are you marketing to? Message = What is your message? What are you trying to say? Media = How are you reaching them? 3 Traits of Successful Real Estate Marketers To wrap all this up, let’s look at the top 3 biggest secrets of successful real estate marketers… #1 Consistency Have you ever spent good money on marketing, then got a deal or two in the hopper, got distracted, and stopped all your lead generating while you focused on the deals, and then found yourself suddenly without any deal flow? This is an all too common problem of inconsistency in marketing that plagues most mom and pop investors.  Successful marketers treat it as a marathon, not a series of sprints. #2 Follow-Up Have you ever spent good money on marketing, only to drop the ball on the follow-up? Maybe you were overwhelmed, missed an email or missed the window? I think we have all been here at least once. Put a system in place to make sure this doesn’t happen. #3 Tracking Have you ever spent good money on marketing several different ways and generated good leads, only to have no clue where the leads really came from? You need to know which marketing tactic worked awesomely, which one only worked marginal and which one didn't work well at all. Remember: “Opportunity is missed by most people because it is dressed in overall and looks like work.”                                                                                                                                            ~ Thomas Edison In other words, a lot of people come out of the gate like a Thoroughbred, but by the time they are passing the finish line, they are a donkey, so don’t be that jackass and make sure you finish strong. Mogul Thoughts? Do you guys have any marketing tips? Do you have a campaign that brought your business to another level? Or maybe you have one that was a total flop. We’d love to hear about it all in the comments section below.   "
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Hard Money Vs. Private Money (and Nailing Your "Elevator Pitch")

JD Esajian | Deal-Getting
" Hello to all our Mogul investors out there. It’s JD Esajian here weighing in on this attention-getting discussion about money. One of our favorite subjects, right? This one’s about raising money. I’ve received an interesting challenge from one of our Moguls. I’ve been challenged to give a presentation on how I would approach a potential private-money investor asking them to fund one of my deals. That sounds pretty simple, but there was one stipulation...aAnd it’s a tough one. The catch was I couldn't mention the fact that I'd been on the TV show, Flip This House, nor the fact that I've been investing for almost 11 years. I'm not one to back down from a challenge, so I’m going to take it on. Two Kinds of Funding But before I do, I want to step back for a second and talk about the two main kinds of funding that we have available to us as real estate investors. This clarification may help you to get a better picture of what raising money is all about. The two kinds of funding are: Hard Money Lenders Private Investors Both of these will provide cash – someone else's cash – for your deals. Here’s the difference between the two. Hard Money Lenders A hard money lender is typically an organized company that does lending as a business. Typically speaking, their interest rates will be much higher than private investors. The rates can range anywhere between 12% and 15% and sometimes higher. Then there're points to factor in. One point is 1% of the amount borrowed and that's paid up front. It's not a derivative of time. The interest is a derivative of time and how long you borrow the money. Private Investors On the other hand we have private investors. This is yet another avenue for investors to have ready cash to buy distressed real estate. Who are these private investors? It can be anyone who has a cash reserve and who's looking for a better return on their money than they're currently getting, perhaps from the stock market. This is a better form of borrowing than with hard money lenders. These are high-income earners who aren’t aware of, or don’t have time to investigate alternative investments (such as real estate). Private investor funds are all negotiable and rates vary. Typically they will range from between 10% and 12% interest. This is based on time and usually there are no points. If a private investor wants or asks for a point, then you can decide if that's something you want to do, and whether or not it makes sense with the deal. Banks Are out of the Equation Bank funding for us as real estate investors is pretty much out of the equation. Not only is it cumbersome, but when you're buying distressed real estate – houses that don't have working kitchens or working bathrooms or they're run-down and dilapidated – banks will turn up their noses. Banks simply are not going to lend money on those types of transactions. If by chance a property were financeable from a bank (meaning the bank would lend money on that property), you're going to be competing with retail buyers – people who are going to live in the home. When you're competing with people who live in a home, and you're the investor who wants to resell it, you’re up against a brick wall. Why? Because the person who's going to live in the home will always be willing to pay more money than the investor. When that's the case, then your competition is magnified and your chances of getting those types of deals are significantly reduced. When we're talking about buying distressed real estate, which is where we get our deepest discounts, the only two choices for funding would be hard money lenders or private investors. Back to the Challenge Now let me handle that challenge that was put before me. How would I make a presentation, and how would I ask them for money? First thing is, we're not asking someone for money. You’re probably wondering, ‘But JD, what are you talking about? Isn’t that exactly what we’re doing?’ So, I’ll say that again. We are not asking someone for money… We're presenting an opportunity for them to make a good return on their money. They can decide if they want to accept that opportunity, if they want to get more information about that opportunity, or if they just want to say no. But we're not asking for anything. When you ask for something, typically speaking, your posture changes. You look down, you don't make eye contact, your voice is weak, you're less confident. When you're presenting an opportunity for someone to do something good with their money, your posture changes for the better. You stand taller, you can look the person right in the eye, and you present an air of confidence. You're confident about what you're presenting. That's a fundamental, but very important, shift. It’s time to get it out of your head that you're asking for something. You’re presenting an opportunity. It’s an opportunity to make money in real estate with fixed returns. Not guaranteed returns, because we can't guarantee rates, but fixed returns attached to real estate (a tangible asset) is a valid opportunity. A Typical Presentation I'll run through a typical presentation and won’t use any of the information that’s in my current arsenal that might prove my credibility. Here we go! Hey, how are you? My name is JD Esajian with CT Homes. My goal this year is to do three real estate transactions, and I'm looking for one potential private investor who’s willing to make a return on their money; a fixed rate of return. I have an opportunity for you to get more information. I've got an FAQ section that I'd like to give to you that will explain all the benefits and also address some of the concerns of lending in real estate. I'd like to leave that with you. I also have my credibility kit about my company, which has more information. It tells my mission statement, what we do in our communities, my goals for this year, the team members I work with, what really matters to me in this business, and all the systems that I use to find properties and analyze deals. I want to leave that with you as well to provide you with more information about my business. Again, I'm looking for just one investor who's willing to have a long-term relationship with me and get a better return on their money than where they are currently investing. If you'd like to get more information about that, please get in touch with me. I have a little bit of time now if you'd like to talk. Elements of the Presentation Pretty good, right? Go back now and see exactly what I did here… I introduced myself. I said the name of my company. I didn't say that I've done hundreds of deals. Because if you’re just starting out, that’s not a claim you can make. I gave my goal. What did I say? I said three properties. That’s better than saying, "Hello, my name is JD Esajian with CT Homes, and I've never done any properties." That doesn't build any rapport or credibility. You can build credibility with someone by the way you communicate. If you don't have a goal for your real estate business, that's the first thing. You need to establish your goals and have them firmly set in your mind. If it’s two deals, then share that. If something is really powerful about your mission statement in your company, share that. Say, you're looking at improving properties in blighted areas and plan to bring in first-time home buyers. Or, you want to help distressed homeowners get their credit back and buy homes for the first time. Whatever is unique about your business that you're passionate about, share that. Then say what you expect your business will look like as it grows. Those points will have a bigger impact and create more credibility, than just saying you’re new to this business. Credibility Kit Then I offered them a credibility kit. Have you created yours? Our mastery students have the ability on the website to download a very detailed credibility kit. It’s the same one that we use – one that we created. All you have to do is plug in all your information. As an investor in your marketplace, you’re going to need to create your credibility kit to present this information about your company: Mission Statement Your Goals What systems you use to analyze properties FAQ section The FAQ section will answer questions and concerns that your potential lender might have. What are the things you would want to know if someone stood in front of you? What kind of returns can I expect? What are the risks? When do I get my money back? Those types of questions. You can create a list of questions that you might have and just answer all those. I wanted to share on this subject of raising money because many beginning investors use “I don’t have any money,” as an excuse that stops them from moving forward with their goals. Now that excuse has been obliterated! So get out there and go for it. Want more awesome info from me? Make sure you check out my previous lessons. Holla at us Do you include any other details in your credibility kit? Do you have a solid private lender pitch? I wanna hear about all that good stuff in the comments section below.   "
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Guerilla Marketing: The Kidnapper Van Strategy

JD Esajian | Deal-Getting
" Hey Moguls, JD Esajian here… You’ve seen it…. the shady yet kinda groovy Scooby-Doo van with no windows that’s parked indefinitely on a street corner or gas station... As it turns out, most of these “kidnapper” style vans aren’t so shady at all. In fact, they’re brilliant! Brilliant marketing strategies, that is. Own Your Own Kidnapper Van I’m a big fan of guerilla marketing and an even bigger fan of the kidnapper van marketing strategy. Why? Because vans with a solid marketing messages make the phone ring. Period. If you want to generate more leads (of course you do), and you want to inspire motivated buyers and sellers to pick up the phone, then you should consider investing (breath, it won’t break your bank) in a kidnapper van of your own. Now, I’m not talking about the plush soccer man van or the cross country camper style monster van. I’m talking about your basic, probably needs some works, used van from Craigslist. I bought my kidnapper van for $1,000. After a little TLC, a basic oil change, tune up, registration and few other minor details, I got my van up and running for about $2,000. But let’s talk about your marketing message… The van as it stands won’t cut it. You’ve got to include your phone number and/or website – on both sides of your van – and a killer marketing message that will speak directly to potential clients. I’m talking about speaking to the real estate problems that people in your community are facing regularly. FORECLOSURE RESCUE That’s is my marketing message that cost me just $500….and it works. Park Smart Simply putting your detailed van on the road isn’t enough. Will you generate some leads? Probably. Will you be maximizing your marketing vehicle’s reach and exposure? Not even close. If you want more eyes on your van, you’ve got to park it in a prime location…and keep it parked for a few weeks or even months. This will produce more leads and allow people to see your marketing message repeatedly, which is the key to marketing success. Repeat exposure is what you need. Park your marketing machine on a busy street corner, or better yet, a gas station with tons of traffic. Pick a mom and pop station, and pay the owner a small monthly “space rental fee” to keep your van parked. I paid about $150 a month to park my baby, and it was worth every penny. Remember, it only takes one small wholesale deal to pay for your vehicle campaign…and then some. Deal or No Deal? In case it wasn’t obvious, owning your own kidnapper vehicle is a major deal! But you’ve gotta get your van up and running and parking in prime real estate. Outdoor advertising may seem old school, but old school works! Use your van as your own personal billboard, and watch the leads come pouring in. Look for my $2,500 all-in total, I got a marketing campaign that’s generating lead after lead after lead… so go for it. Oh, and while you’re at it, check out my awesome previous lessons to remind yourself of other ways to build your business, generate leads and ultimately make money! Talk to Me Got any kidnapper van tips? Share with us below.  "
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6 Secrets to Make More from Your Direct Mail

JD Esajian | Deal-Getting
" How many times have you received a piece of direct mail and simply thrown it in the trash? If you had a dime for every time…right? The reason you trash direct mail isn’t because you don’t ever need the services being marketed; it’s because the piece didn’t speak to you in some way. Hey Moguls, it’s JD Esajian, and I’m thrilled to be back with another awesome lesson. And if you like today’s lesson (I know you will!), check out my other great lessons too. Today, I’m here to share with you some tips that will help you maximize the results of one of the most essential real estate investment deal-getting tools. I’m talking about direct mail marketing. Through targeting with distinctive postcards and letters, direct mail is one of the most powerful ways you can connect with distressed sellers. The tips I’m about to share with you will amp up your direct mail campaigns and ultimately help you close more deals and make more money.  And who doesn’t want more money? So what’s your goal with direct mail marketing? To be seen, of course! You, as a dynamic investor, need to create – or have someone else – create effective direct mail pieces that arouse curiosity and elicit a response from your target audience, which brings me to my first tip for successful and impactful direct mail marketing. Tip 1: Know Your Target You want motivated sellers; sellers facing foreclosure; those with undesirable inherited properties. Remember who you’re trying to connect with, and that you’re services will offer solutions to their problems. You’re that investor who can help them unload their unwanted property. Tip 2: Consistency Is Key If you want to increase your response rate, you’ve got to get in front and stay in front of your motivated sellers. One time won’t make the phone ring. Trust me. You could do what many investors do; they mail a letter once to 1,000 sellers. When you say it out loud, it sounds impressive. Surely mailing to 1,000 sellers will generate a significant response! Shall we keep it real? Repetition and consistency are your keys to success. I’d rather you touch (figuratively, of course) 250 people four times with one amazing mailer and increase your response rate, than mail once to thousands of people. Period. Decrease the amount of sellers you market to, hone in on the right ones and consistently (without bombarding) market to them. Remember, a good response rate is 3%-8%, so if you’re in that ballpark, you’re rockin’ and rollin’. (If you’re nailing 8%, you’re knocking it out of the park, and major props to you!) Tip 3: Follow Up Repeatedly You’ve got to follow up on your mailers. It’s that simple. I could go on for days sharing stories about successful follow up and their outcomes. But (sadly) we don’t have that kind of time… What I can tell you here and now is that you never know what the compounding effects of your communication can do. It may take weeks, maybe months – possibly even longer – but timing is everything! That one additional phone call or email could make all the difference. So pick up the phone; send that email. Just follow up! Invest in the connections and contacts you’ve established, because in time it will pay off. Tip #4 Track Your Results Just like following up is a must, tracking your results is just as important. If you don’t know where you’ve come from, how can you know where you’re going? Good question, right? Understand who you’re connecting to, who is responding to your mailers, and more importantly – who isn’t. This way, you know which campaigns work, which don’t and how to tweak your marketing moving forward. Tip #5 Outsource So, clearly, there are lots of tasks to do when utilizing direct mail. And one of those should be finding an efficient way – or resource – to get ‘er done. Who has time to answer all those calls that are going to be coming in once your mailer is out there? One word: Outsource. Check out yellowletterscomplete.com and yellowletters.com and hire a reliable answering service that can do the work for you. If a knowledgeable, professional voice isn’t there to greet your motivated sellers, you’re going to lose their potential business. Ouch. Outsourcing to fulfillment companies may require a small financial investment, but it will free up your time to focus on tasks that truly need your attention. Tip 6: Creativity Creates Curiosity I know, I know. Even I can’t help but roll my eyes when I say the clichéd “think outside of the box.” But that truly is the best way to grab the attention of your sellers. Get creative! When you’re creative, your sellers will think twice about trashing your mailer. Push the envelope a bit and don’t be afraid to include a little something bizarre, unique or different (not offensive or inappropriate) in your mailer to raise some eyebrows. I’m Listening Got any other direct mail tips? Share them in the comments section below.  "
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