Mitch Goldstein | Coach Mitch | June 10th, 2007Coach Mitch’s REFLECTIONS™
Step 4 – Market to your list of motivated sellers.
After you have picked your geographic areas, gotten your appropriate databases, selected the list of properties to market to – now you must do the marketing.
Marketing is a very interesting subject. Many books have been written on the subject and I have read my share. I agree with many marketing concepts and disagree strongly with some others. Ultimately, you will have to judge for yourself what you like.
Coach Mitch’s “Ridiculously Simple System…” comes with many templates of letters and postcards and scripted conversations that you can use. They have been found to be very successful.
The basic idea is to contact the tax delinquent in some manner, engage them in conversation (negotiation) and see if you can create a match. Not all sellers will be desperate. Not all sellers will like you. Not all sellers will go along with your plans. However, if you are able to create a satisfactory relationship with the seller, you have the potential that they will meet your demands.
I like to advise students to do marketing in small chunks, not big events. If students do a small marketing, then the marketing costs are low and each response can be worked properly. The idea of doing small marketings is important because our marketing is so effective in getting results that large marketings will get too many leads which cannot be worked properly.
This last thought is important. One of my strengths is that sellers believe that I give them significant attention. That is because of the high level of detail that I get into when questioning a seller about their situation. I can then fashion a solution that is based upon their actual needs and some of their wants.
On the other hand, if you do a large marketing, get good results, each prospect becomes less important, because you have so many to deal with. The tax delinquent feels this and shys away from you. Tax delinquents will cut their noses off and spite their faces. They must feel good about you and your ability to perform. If they think that you have too much on your plate, then they can think that they will get lost in the mix.
You must understand the reason to be very selective in choosing the number of leads to work.
Let’s say that the county that you are choosing to work has 10,000 tax delinquent properties. The average state has 67 counties. You do the math. A state can easily have 500,000 to 1,000,000 tax delinquent properties at any given time.
At 10,000 prospects for each of your ‘home’ counties, you would have to make 200 contacts per week, each week – for an entire year. That equates to 40 contacts per day for a five day week – every week for a year – for each county. Foreclosure investors would just love to have this number of qualified leads.
My students have gotten great results with my marketing. The templates for various letters and postcards are included in Coach Mitch’s Tax Delinquent Real Estate – “Ridiculously Simple System…”
When doing a mailing, the expected returns do vary, mostly depending upon the condition of the local market. However, regardless of the market, we always get at least 10 times the return of the typical direct mail marketing of 1/10%.
Students always get a return of at least 1%. That equates to 2 prospects per week contacting you, if mailing 200 postcards per week. Tax delinquents often will just want to ‘give’ you the property to get out from under the stress of the situation.
Students have had 17% of prospects contact them for a quote on the property. For 200 mailed, that equates to 34 properties to review or 7 properties every single day. You will often get 3% – 5% of prospects contacting you. That means, mailing to 200, at a 4% return, 8 properties per week or 1.5 properties every day will need to be reviewed. That is a lot.
You probably cannot do justice to this number of leads. If this were foreclosure investing, then that would be doable, because the margins are very slim and it is easy to see this and then ‘Just Say “No” ‘. The profit margins when investing in tax delinquent real estate can be enormous, so be ready to act.
In tax delinquent real estate investing, the sellers motivations often are very high. Typically, you are the only person showing interest and Murphy has to sleep sometimes, so you might just be the one who gets the purchase at 50% of fair market value or less. Any transaction that you can comfortably pay for in cash, could be done in cash. All other transactions should be controlled via Coach Mitch’s famous $1 Options. I have had over 225 Options in place at one time. I have never paid more than $1 for an Option.
I hope you are starting to understand the power of this system.
See Coach Mitch’s “Ridiculously Simple System…” ™ for details.
Go for it,
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