Anyone in business for themselves should recognize the power of a referral. Growing your referral base should not only be the goal of new real estate investors, but those in business in general. While generating these types of leads is not as easy as it sounds, it is also not as difficult either. It takes a steady dose of networking, social media activity and the ability to close deals. Moreover, it takes a willingness to communicate where your referral is at every step of the process and the ability to follow up with whomever you received the lead from. These may seem like simple tasks, but they are rarely done enough and rarely done as well as they should. Take control of your business and recognize the power of a real estate referral.
As a real estate investor, you need to understand the process of receiving and maintaining referrals. The very first thing you should do when you get a call or email from an unsuspecting source is to ask how they received your contact information. Once you determine where the referral came from, you should immediately call that individual and thank them for their efforts. Even a little appreciation goes a long way. Whether the lead works out or not is insignificant. The fact that they would trust you with someone they know speaks volumes. In such a scenario, you need to handle the lead with care and go out of your way to communicate with them. This doesn’t mean you have to make an offer you don’t feel comfortable with, but you should act as quickly as possible. If the deal isn’t for you, let them know immediately.
Most of your referral pool will come from the network of people you know or people you have worked with in the past. This is important to remember when you go about your day to day business. You can’t just turn on the charm at networking meetings and neglect everyone outside of them. Every realtor, attorney, contractor, seller, buyer and fellow investor can be a referral source or could turn people away from working with you. Getting referrals should be something you strive for every day and rarely happens overnight. If you remember this the next time something bad happens with a deal and you handle it in a fitting manner, everyone involved in the deal will take note and appreciate it. Somewhere down the line when they get a deal, they will surely think of you.
A large part of referrals in today’s day and age will come from social media activity. This is both a blessing and a curse. The blessing is that it is easier than ever to reach a large amount of people, many of them you may not even know. The curse is that it is also easier than ever to find information out about you. It is the definitive double edge sword. Everything you post online is there for the public to see. Everything you like on Facebook or retweet on Twitter may seem innocent enough, but someone is forming an opinion about you based on what you do. If you engage in a feud online that is open for people to see, you are decreasing the chances people will want to work with you. There is nothing wrong with posting pictures of family and friends or telling the world what you had for lunch, but you have remember that everything you post is out there for the world to see, good and bad.
Every deal you close is an opportunity to grow your business. With every deal, you can have multiple realtors, attorneys, a mortgage broker, a buyer and even a seller. These are people who you have worked with and are friendly enough with you that you should call them when the deal is over and ask to keep you in mind in the future. You should stay in touch with them every few weeks or so or when you need their services. After a closed deal, you should look back on it and find out the source of the deal and work it to see if there are any more. You can’t forget about how you got the deal and you need to stay in contact with everyone involved. A periodic email, text or even phone call can reinforce a relationship and keep you on their mind the next time an opportunity presents itself.
The little things, like a handwritten note of thanks or a card to celebrate the anniversary of a purchase, can really go a long way. These items take less than five minutes to do, but can lead to many more deals down the line. A realtor may like the way you work and put you on the top of their list if they get a new listing. The same goes with an attorney or accountant you come in contact with. It is the small things that separate you from everyone else that makes other people feel special.
A good referral business can save you money on marketing and improve your closing rate. Referrals are much more likely to close with you rather than shopping around and talking to other investors. This should be where the bulk of your marketing time goes. All it takes is treating everyone in the deal and everyone that you meet with a little courtesy and respect. It may sound obvious and almost too easy, but it really isn’t. People like to work with people they actually like. If you can focus on this, your referral business will pick up and everything else will fall into place. If you take care of your referrals, they will take care of you.