SCENARIO: I am to be airlifted from my hometown and dropped into the middle of undisclosed hostile territory.
MISSION: Secure at least 1 package (aka: a real estate deal), that has a profit of at least $5K for a wholesale investment, or a profit of at least $20K after a large scale renovation.
EQUIPMENT: Starting at only:
my credit and cash
A PC with Internet connection J
My knowledge of Real Estate Investment Strategies
DEADLINE: 30 days, or I self-destruct
Strategy: This is exactly what I would do, step by step, if I was presented with the above scenario. Understand: There are 3 key elements that need to be in place for this to happen.
1) Market – Learn and study the terrain, know where the hills and valleys are, and study/decide the best topography from which to launch my assault.
2) Marketing – Implement an Action Plan in accordance with my SOPs (Standard Operating Procedures), which would provide maximum overlapping coverage of my shooting lines. We need to change a plan to pick up the package.
3) Make offers: try to recover a package. If unsuccessful, try again. Remember: lives are at stake.
Objective #1: Know the market
To provide an all-out assault, you must study your enemy carefully. Determine when they move and why. You will need to:
– Purchase a map of your area at a local gas station/bookstore, or print one from your PC. This will help you as you learn your market and conveniently mark various sections of your map to explore.
– Check to see if the county has a “good” online Tax Assessor site. Well could be defined as one that has images, or possibly one with an exact property value. Please note that the assessed value in many parts of the country is unreasonable. It is right. MANY county assessors are online and many provide a good zero point for establishing home values. If all homes are selling at 200% of appraised value, multiply by 2. If homes are selling at 75% of value, multiply 0.75 times the appraised value of the home you are appraising.
– Zillow.com: Although the values are often completely off the mark, I can quickly look at photos of homes, see street layouts, and analyze SOLD comps. You may or may not have access to the number of bedrooms, bathrooms, or services, but you can at least get a rough idea of what a home may be worth.
– Locate 2 or 3 real estate agents to work with.
– Once the neighborhoods and areas that appear to be strategic vantage points are determined, then it’s time to take a closer look. You’re looking for neighborhoods that are “family-friendly” areas that are reasonably neat, clean, have well-kept grounds, but are not above the median price range for the area you’re looking for. In my hometown, a typical bread and butter neighborhood is a 2 story, brick ranch, split level in the $70-$135K range. I don’t do war zones, or areas where the “owners” generally don’t want to live. You need to think: is this an area that a first time homebuyer, or family, would consider living in? Is it pretty, well cared for, and desirable? Or, is it somewhere that someone lives or shops, simply because they are forced to (more or less) due to their financial difficulties?
Objective #2 – Marketing assault
1) Immediately set up a tactical HQ to do your research/make phone calls.
2) Set up a website that says “We Buy Houses”. Set up a Google AdWords campaign to locate anyone who types keywords like: “selling my house”, “homebuyers”, “in foreclosure”, etc., all centered within a 20 mile radius of the zip code from which I am operating. The AdWords campaign would look like this:
We Buy Houses
Easy money. close quickly
FREE report. Help 1ClickAway
Address of your website
On my site they get my phone number, email, form submission tools, etc.
I understand, normally I have to talk to about 40 owners for sale to get 1 deal. I also have to offer at 10 Bank REO to get 1 accepted. We’re going to follow the “Shock and Awe” strategy and tackle many important but different angles all at once as timing is my biggest responsibility on this mission.
3) Have agents put you on a “hot list.” This is an email sent to you with property listings. I want to see every new listing, price reduction, or home that has been in 180 days in the areas I target.
These agents are going to do a lot for you. They will give you comparable sales information. They will show you properties and write your purchase offers. Choosing the “right” properties wisely will save time. If the neighborhood normally supports $115-$122K split-level homes, and a bank foreclosure hits the market at $105K, I’m not rushing to offer it. Could it be a deal? Yes, you never know what someone will accept until an offer is made, however I know the odds are less likely that you will get a “deal” on that property. If that same house goes for $80K, yes, I’m going to pass or look at it right away. That house may already be a surprising distance away.
4) Find local wholesalers:
Ask Bank REO agents who are the big buyers of investment properties in the area. Call any advertisement in the newspapers (both large and small newspapers) that advertise “We Buy Homes.” Know that probably 80% of the ads are placed by “investors” who are just starting out and really have no idea what they are doing. Most couldn’t buy a house if they had to. That’s fine. You will order them quickly. Look at their websites, if any are listed. Call people and find out what inventory they have. You can also have agents pull all the properties sold in the area that were in the bottom 20% of sales prices. See whose names continually appear and locate them. You may need to visit the office of the Recorder of Deeds. These investors buy houses, sell houses, have a network and make deals.
5) Local Real Estate Investor Groups
See if there is a local REIA online. Check with the investors you contacted in #4. Ask everyone you interact with. We are collecting intelligence along the way, which will be used to acquire the package.
6) Order 200 Bandit Signs and saturate the area.
Get the 18″X24″ signs with blue letters. Don’t put the website on them, just your 1-800 phone number. Bandit banners may make the local bosses unhappy, but hopefully your mission is complete before they send their “special agents” after you. j
7) Call them all For Sale by Owners and For Rent by Owners.
Call both the ones on yard signs you saw while driving and the ones in the classified ads.
8) As you drive through neighborhoods, any house that appears to be vacant, place a caller on the doorknob that says “We Buy Homes” with your phone number.
AAR – After Action Review
At this point, you have the following marketing methods to attract potential customers:
– Internet/website advertising
– Real estate agents working in your corner
– Call FSBO, FRBO
– Vacant houses
– Bandit signs
– Wholesalers/Investors
Last but not least:
Objective #3 – Make offers
This last objective completes the “3M’s” of Real Estate Investment: Market, Marketing, Making Offers. It doesn’t do you any good to know your real estate market and how to find deals, and then NOT make ANY offers. Make offers that don’t make you lose money. Make offers that make sense. If they are good deals, you will be able to move the property for a cash gain.
Simply put, if you strategically deploy several different types of drones to search for your target and then start firing missiles, you WILL SURVIVE your mission and successfully return home with a package.
MISSION ACCOMPLISHED.
happy investing,
Brandon Yeager