The real estate investing business is largely about taking advantage of the opportunities you are presented with. The more leads and opportunities that come your way, the higher the chance that you can turn them into actual deals. Marketing certainly plays a big part in the number of leads you get, but it can be an expensive and time consuming proposition. Instead of focusing your lead generation efforts on distressed homeowners and one off deals, you should concentrate on your existing database. If you can grow your referral network to the point where you have leads constantly coming in, you will never have to pay for a deal again.
There is a lot that goes into building solid referral sources and contacts. Much of this has to do with how you interact during every transaction. Whether you know it or not, you are being judged on what you do and say – especially during the difficult moments in a deal. If you exhibit poise and do your part, you will likely become an important contact for other individuals you are working with. Conversely, if you are difficult to work with and don’t return calls or try to squeeze every last dollar out of the deal, you will be remembered in a negative light. You are auditioning with every deal you are involved in. If you want to gain referrals, it is important to keep this in mind.
Referrals are not just going to fall into your lap. You need to work for them whenever the opportunity presents itself. Most deals have multiple representatives on each side, meaning there could be close to half a dozen potential contacts on any given deal. Every person in the deal should be contacted as soon as you close. You can have an email template that you use or take the time to personalize your message catered to the specific deal. The email should be a further introduction of what you can do and how you can do it. This should be followed with up with a handwritten letter thanking them for their role in the deal, and an invitation to meet at a specific date in the future. In giving a specific date, you set a firm time that is difficult to back out on. If they can’t make your date, do not consider it a failure. Keep following up once a week until you have a meeting. If you do this on every deal, you will slowly build up a network of local people that know you. If an opportunity comes up, they will surely keep you in mind.
In addition to keeping in touch with contacts from current or past deals, you need to plant your flag in local networking or real estate groups. These meetings are usually only once a month, or once every other week. Instead of going into these meetings trying to tout your services, try talking to as many people as you can: make them the center of the conversation. If all you talk about is how many deals you closed or how much money you make, nobody will want to work with you. In listening and asking questions, you make them feel involved and will leave a good impression with them. These meetings are much more about your personality and whether or not someone wants to work with you. There are plenty of investors that have access to private money or can close quickly when a deal comes their way. What separates you from all the other investors is your personality and if people want to work with you.
Believe it or not, wholesalers and other investors are a great referral source. A wholesaler makes money when they assign a contract to an end investor. Most have a pool of investors that they use, but not every deal will be a fit for them. If you stay in touch with these wholesalers, you can find deals that other investors may not want. Once you close one deal and show them what you can do, you better believe they will want to work with you in the future. You can find these contacts through investment club meetings, realtor contacts and even Craigslist. There is also nothing wrong with reaching out to fellow investors for any deals that may not work for them.
The more people you reach out to, the higher the chance of landing a lucrative referral. Paying for mailing lists or other advertising can be a very effective method, but it is something that must be done with consistency and great frequency. Building your referral base takes time, but once you do it you can save thousands of dollars on marketing every year. Additionally, the leads you do get will have a much greater chance at closing because they are usually from a source that wants your help. If you spend the time to grow your referral base, your business will grow right along with it.