[Editor’s Note: This is the second installment in Marko’s six-part series on investing in real estate foreclosures.]
If you market your services to people in foreclosure–or to any targeted list as I have described in a previous article, you are going to get leads. Please remember: Leads are not deals…yet.
Some may become super profitable deals that put thousands of dollars in your pocket, but you must be able to evaluate them and focus like a laser beam on the best leads and discard all the rest.
The temptation for new investors is when they start getting leads from their marketing, they get excited (understandably!) and start to contact everyone. It only takes a few days of this to understand another of my important axioms:
All leads are NOT created equal!
You will learn very quickly that you will never have enough time to contact everyone, so how do you quickly and efficiently evaluate and screen your leads?
I do it with a 24-hour recorded message, my website, and using a live answering service. Let’s focus on the importance of a good website and how I use it.
Almost all my marketing to people in foreclosure drives the prospect to one of my websites, and I do that for two reasons. One, because I know that people in foreclosure are scared and confused and much less likely to respond to a card or letter that asks them to call you, the investor, directly.
They think you are out to steal their house and that you have so much more knowledge than they do, that you will take advantage of them.
Secondly, and more importantly…
My website makes them qualify themselves!
I load up my website with audio/video testimonials from previous sellers, so the first thing a prospect sees is audio testimonial after testimonial of people I have helped by buying their home and stopping the foreclosure process–people whom I helped after their listing has expired, etc.
These are all real people who were in a foreclosure or had some other motivation and needed a quick sale.
After my prospects have seen the testimonials, I invite them to submit a form with all the necessary information to my office. I promise a response within 48 hours, but at NO time do I tell them that I will make an offer on their home.
The questions I ask on the form are well thought out and are REQUIRED information before they can send me their form. Every one of these questions is designed to get qualifying information, and just as importantly, disqualifying facts.
They must tell me what they owe, to whom, and all the standard questions you would imagine. But I also ask questions that “test the water” to see how motivated they are. Finally, I ask them to describe the situation that has brought about their current circumstance. This is the key question in many cases!
Here’s why…
If someone writes a whole lot on the last question, I mean two and a half pages in some cases, then that tells me something important about that person. If all the numbers work, I will put that on the top of the pile.
Why? Because it tells me that they want to tell their story to someone, and I’m a good listener.
If you let someone pour out their heart to you about all the tragic circumstances and bad luck that brought them to their present position, and you are able to be sympathetic and empathetic. Then when it comes time to present the deal, they are now on your side and it makes the negotiations much easier.
Conversely, if someone writes on the form, “I’m not taking one penny less than the full value of my house. My bother-in-law says it’s worth $250,000, and that’s what I expect,” why would you waste 10 seconds on that lead? (Note: This homeowner’s response will probably change as the date of auction gets closer!)
My website does almost all of the qualifying of each lead. I waste NO time on any leads where there is no deal to be made.
I have been blessed and have more money than most people, but I have no more time than anyone else! That realization has lead me to be vigilant about time wasters, and it has made me a better, more focused real estate investor.
Bottom line:
I recommend you establish a method of pre-screening and pre-qualifying your leads, preferably with a system like a website where the prospects screen themselves. This will make you wealthier–and a better investor in a much shorter period of time.
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