As a real estate investor, marketing your business is a given. Buyers (investors) and sellers don’t usually rain down from the sky. Whether you decide to use direct mail, online advertising, or a combination of other methods as part of your strategy, there is no way to reach prospects without letting people know what you do.
Regardless of which marketing tools you use, your phone is going to ring. So, what do you do with prospects once you make contact? This is probably the most critical phase of your new relationship. What you do here will determine whether or not you’ll make a deal.
Sharpen your Pencil!
This is the information gathering stage, so be prepared to take good notes. It’s the point at which you’ll determine the direction of your relationship with the prospect. Every bit of information you gather will help with your decisions about the contract between you and your new client. In a future blog article we’ll discuss the initial interview in detail and what types of questions to ask. For now, we’ll address where you go with what you’ve got.
Not every opportunity is right for every investor. Some investors buy, refurbish and flip, while others buy and sell contracts or middle-man deals between investors. There are so many ways to work this business. Take time to decide what’s right for you.
The Fork in the Road
After your first interview with a prospect, the answers to your questions will help you determine whether you want to go forward with the deal or sell your rights to the opportunity to another investor. You can’t have it both ways. Deciding to sell your rights to the opportunity requires a clear understanding of what potential investors might want you to negotiate on their behalf. If you assign the contract to another investor, they’re going to step into your shoes. Better make sure your shoes are the right size. If you don’t know what the investor is looking for, they might not want a stake in the deal.
Long before the deal is transacted, you’ll want to determine what the seller wants as well as what a buyer are looking for. Is it a match? For instance, how much the seller wants down and how much the buyer is willing to put down need to intersect.
Maintaining a data base of investors is important for this reason. If you work with only a handful of buyers, you lessen the likelihood of matching ideal buyers with ideal sellers. Variety is the name of the game.
Investors are Business Owners
The most important thing for you to remember is this: as an investor you are in business. You’re an entrepreneur. As an entrepreneur you need the proper education and solid mentoring to back you. Having the right tools in your belt, you’ll know how to put deals together that make sense for all parties involved. But you can only do this if you educate yourself.
Knowing what you need to know as a real estate investor, you’ll be able to easily decide whether you want to stay with the opportunity all the way through the deal or structure it so that a buyer can step into your position and everyone will have what they want in the end. Your goal? Win-win-win.