The real estate investing business is largely about the relationships you foster. In fact, all of the knowledge in the world won’t help you if you can’t build relationships, or at least develop a working rapport with others. To that end, establishing yourself in a local community is perhaps the best way to build a sustainable business. Not surprisingly, building a referral base will ultimately get you closer to such a goal. Not only are referral deals more likely to close, but they should continue for as long as you hold up your end of the bargain. Here are five steps to growing your referral business:
1. Focus: There are many online communities you can join that have the potential to add real value to your business. However, if you want to get the best bang for your buck, you should focus on your local market. Regardless of where you are, there is a network of real estate agents, attorneys, accountants, contractors and mortgage brokers that can be tapped into. All of these people, in one capacity or another, can be involved in the real estate world. Make a commitment to attend as many networking groups and clubs as you can find. Once people see your face with regularity, they will want to know more about you. From there, ask to meet outside of the group, as to find out how you can grow their business. For every five lunches or dinners you have, you may only get one person that you think can be a good match, but that one may be all you need. Follow up with that person constantly, and grow your network from there. All it takes is one solid local referral source to set your referral engine in motion.
2. Build: Every real estate investing club meeting and networking group should be treated as an opportunity. You may not hit it off immediately with someone, but you never know what the future may hold. With every exchange you make at these meetings, make sure it includes asking for a business card. You should make your next communication within 24 hours of your initial meeting. Additionally, you should compile a database of everyone you meet. Be sure to get their name, address, email, phone number and business. Your list could be put in a constant contact folder or another outsourcing site where you can easily reach them whenever you like. Even if you have the greatest ten minute conversation at a meeting, it doesn’t mean they will remember you. Many people will work with the most recent person that reaches out to them. Make the commitment to touch base with your list in once capacity or another every month. The longer you wait, the more likely that they will forget about you.
3. Refer: Perhaps the best way to gain a referral is by giving one. Over the course of your business, you will come across people that need other services. Instead of dismissing them, you should be ready to rattle off a few names. Whether they are ultimately used for the job or not is not the point. By reaching out to your contact and telling them that person “x” may be calling them for a quote or to ask a question, you generate good will. Even if they don’t get the job, you can bet the next time someone mentions a property for sale they will think of you.
4. Respond: If someone sends you a referral, be sure to treat it like gold. Regardless if the person ends up working with you, it is important to call your referral and thank them for the opportunity. Think about what it says about you if you don’t follow up. For starters, you can imagine that they will not give you another one. In this day and age, it is as easy as ever to stay in communication with someone. As a general rule of thumb, an actual phone call back is never bad, but you can respond in the manner that they responded to you. You shouldn’t return a phone call with a text back. However you respond, it doesn’t take more than a few minutes to stay in touch. There is no excuse for not responding to a referral.
5. Ask: If you want a referral, you need to ask for it; it’s as simple as that. It is amazing how many people in business are uncomfortable asking for referrals. If your local contacts don’t know what you do or how you can do it, you need to make it as clear as possible. You should then proceed to ask them if they know anyone who may be interested in selling. Maybe they say yes, maybe they say know, but the only way to find out is by asking. You would be amazed how many mortgage brokers or attorneys have potential deals that need the help of an investor who can close quickly. At the end of every communication, you should ask for a referral. They just may say yes.
Referral leads will reduce your cost of marketing and often lead to more deals. Whatever you have going on, you need to make time to constantly growing your referrals.