Ask Brian is a weekly column by Real Estate Expert Brian Kline. If you have questions on real estate investing, DIY, home buying/selling, or other housing inquiries please email your questions to [email protected].
Question from Nick from NE: Hi Brian, What’s a guy to do when he wants to get started with real estate investing? There is so much information out there that it’s overwhelming. Should I just buy some course and follow what another guy says I should do? Considering all of the information available, it seems like I should be able to figure this out without forking over several hundred dollars. As I get started, one thing that I keep seeing over and over is that I need a marketing strategy. But that’s what most of these guys want a pile of money for - to sell me their marketing strategy. It can’t be that hard to teach myself one of these strategies. I just need to decide which marketing strategy I want to learn. What do you think is a good marketing strategy for a beginning investor?
Answer: Hello Nick. First, let’s clarify what we are talking about. Two big pillars of real estate investing are the investing strategy and the marketing strategy. Your investing strategy is the type of investments you’ll be making such as wholesaling, flipping, or holding long term as a landlord. Your marketing strategy is how you attract people that are interested in making a deal with you. Nick, I’m going to take you at your word and share some of my thoughts about marketing strategies for beginners.
So, we’re talking about finding the people that you want to make deals with. For instance, as a landlord, you’ll need to attract tenants by running online and local newspaper ads in the classified sections where renters look for vacancies. That’s probably the most common marketing strategy. However, as a landlord, you need to first find rental houses - which requires an entirely different marketing strategy. Many details go into a full marketing strategy but the place to begin is by choosing the media. The most effective media are online, direct mail, and professional networking. Here are some key components of each.
Online real estate marketing works. Everything about real estate is online. Several studies show that over 90% of all buyers (retail and investors) begin their search for a house online. The National Association of Realtors says about 51% of buyers found the home they purchased on the internet. But the internet is a world wide web. You have to seriously narrow down your marketing strategy to something manageable. You can run Geographic Google click-thru ads, social media is extremely effective, at some point you might want your own website, and there are more alternatives like article marketing. There is always another level to a marketing strategy. Just for social media, the four big platforms are Facebook, Twitter, LinkedIn, and Instagram. The next level down is building your brand, which is always important. But when it comes to online strategies, you need to think about Search Engine Optimization (SEO). This includes keywords in the message content, a title tag, meta description, and links to landing pages. Nick, think seriously about online as your marketing strategy and then dive into the details about how to do it right.
Many investors swear by direct mail. This can involve targeting a specific zip code and then sending out postcards or letters. One of the most proven methods is the handwritten letter on yellow paper. According to the Data & Marketing Association, 70% of U.S. consumers say snail mail is more personal than the internet and 42% read or scan direct mail pieces. The handwritten yellow letter isn’t actually handwritten. A commercial printer can print yellow letters for you using a font that looks hand-written and use variable-data technology - which means that each piece includes unique information, like the address and owner’s name. This is another strategy that needs your branding along with a well-thought-out message. Of course, you don’t have to send these to an entire neighborhood. You can narrow it down to the specific people you’re interested in doing a deal with. If you want to do a broad mailing on a smaller budget, you should consider postcards.
Professional networking is good for wholesalers. An important thing to consider before launching a marketing strategy is your target audience. If you’re looking for distressed sellers, direct mail is probably the place to start and online marketing can target just about anyone. But if your investment strategy involves wholesaling, professional networking is an invaluable marketing strategy that works whether you’re the wholesaler or buying from a wholesaler. But don’t network only with real estate investors. Others that belong in your network are accountants, lawyers, doctors, and other professionals with money to invest.
Nick, think of marketing as a funnel that moves people towards finalizing a deal. You want a lot of people going into the wide end of the funnel because many will drop out without completing a deal. What comes out the small end are the deals. As you gain experience as a real estate investor, you need to be constantly measuring and tweaking your marketing strategy that feeds your funnel.
Let’s hear about your favorite real estate marketing strategies. Please add your comments.
Our weekly Ask Brian column welcomes questions from readers of all experience levels with residential real estate. Please email your questions or inquiries to [email protected].