This is the sixth episode in our special Q & A Series. We look at how to get started on your property deal sourcing business with a limited marketing budget.
Mark: This is really good. So, Ann Ferrari has asked "Knowing what you know now, how would you start up using a small marketing budget?" What I will say is sourcing with Mark, this episode, this session that we recorded today, is on exactly this topic. So, if you’re podcast listeners, I go into a lot more detail on this in my twelve minute session this episode. So just listen if you want to do that. But for tonight I'll just go in. When I first set up Goliath I was on my own, and I had little budget for marketing, I'd hardly had any sort of marketing spend whatsoever and probably the biggest mistake I made was I tried to go after everything.
So, I tried to go after BNV, I tried to go after Le Soft, I tried to go Rent-To-Rent. I literally was like a bull in a China shop trying to generate leads and deals and I was speaking to so many people about so many different strategies and deal types and offer letters, and you just don't know whether you're coming or going. It's very hard to keep on top of your CRM, your database, your lead database. Actually that is probably one thing when I look back, if I’d focused on one specific strategy, sourcing from one specific investment type I'm sure that the results would have come a lot quicker and been a lot more consistent.
The problem with having a scattergun approach is it's very inconsistent and quite often you lose momentum because you're dealing with so many different types of deals, you can lose track and things fall through. You drop your ball with follow up. So, if you focus on one specific investment strategy, that's a very big tip that I would give now looking back at what I did.
Also, with a small marketing budget there are a number of different ways to generate leads for free or for very little cost. A few of the obvious ones; private ads online. So, places like Gumtree, Preloved, UK Classifieds, Craigslist, you got Spare Room, Open Rent, even Techolo[?] Anywhere that you can get access to the vendor, landlords direct, you want to be going straight to those sites and phoning the number as quickly as possible. Don't mess around with email saying "Is the property still available? Can I arrange a viewing? I'm very interested." Forget all that because you just want to be hitting these people as quickly as possible with a phone call.
So, private ads online are exactly the best way that everyone is going to start generating leads. Now of course because private ads online have got the lowest barrier to entry i.e. they're free and the information is readily available, it means everyone is going to be doing this. So, needless to say I'm sure a lot of you out there are thinking of "I don't cold calling. I'm not a confident cold caller." What I would say is if you want to succeed in this game you're going to need to get used to sales and speaking with people, and part of that is going to be this first call. And all you need to remember is it's not a hard sell, you are phoning the people up to find out if they have a problem that you can solve.
That is a really, really key bit of information when you’re dealing with sellers, with landlords, with property owners in general. You are not phoning up to give them a solution, you’re phoning up to find a solution and that is really important. There's a very big difference between giving them something and finding the solution based on their needs.
So just a bit of a talk tip when you’re speaking to people. Don't be afraid. Most people are fine on the phone when you're speaking to friends and family and you're asking them how the days been. What are they up to? How are they doing? How is whoever getting on? It's exactly the same conversation you want to be having with the property owners. You just need to be relating it to what their situation is; if they're trying to sell, if they're trying to rent. And by doing that you build rapport; the call becomes a lot easier. You'll gain a lot more confidence and you will get a lot more success. So, private ads on line, just phone them straight away.
Social media posting. Another free way to generate interest, generate leads. So again, no cost, which is great. As a Scotsman, I love everything that is free. So, social media posting, and again, similar to the way that you would find an investor, you can do exactly the same for finding people, motivated sellers, motivated landlords because there are groups out there which are private rentals in wherever your city is. Private rentals in Liverpool. Private rentals and Leeds. Private rentals in London. And you get a private landlords advertising in there quite regularly. You can always make contact with them offering your service.
Also, there's website such as Gumtree Leeds, Gumtree London. So, those again, similar principle, but you're getting a whole different audience potentially. And when I say posting that covers both people posting and you replying; but also you posting in those groups telling people what you do, how you can help people. Because that, again, is just completely free. All it takes is time and the more you do it the more your message gets out there, the more you will start to see in terms of results coming your way. So, social media postings are a good one.
Now a little one that I really like telling people about, and it really surprises people quite often is eBay. eBay is, again, completely free and the beauty of eBay is that there are people out there still selling their property. Now there aren't as many people that advertise their property for sale on eBay but there are still the occasional ones that do. And the beauty again is they are contacted directly through the contact seller button and you can often strike up a conversation very quickly about those. So, eBay's a really good one. It's free and there's not many people that advertise on it, but there's not many people that know about it. So, you tend to find that you’re not the twenty-eighth caller that they've had from a property sourcer as you might be finding from private ads.
And then [inaudible] I wouldn't be advising people properly if I didn't say there is some cost involved to doing this properly and direct mail is probably going to be the first thing you spend money on. Some people might be thinking leafleting, but actually the beauty of direct mail is that you can specifically target types of property. You can use portals such as Right Move to build lists of properties that have maybe been on the market for longer than three months or properties that have price reductions or properties that have had sales fallen through and also one of the big ones is the HMO Register.
The HMO Register is publicly available information. It gives you a list of all the houses in multiple occupation addresses in your local council area. Some of the councils give you the licensee name and address. That means it gives you the owner of the property and their correspondence address and then you can write specifically messaged letters to that list in order to generate leads. And because you know list is landlords with properties that are a real pain in the backside to manage, you know that you're going to hit some tired landlords. And I think at forty-five pence a letter, for a hundred pounds you can send two hundred and twenty-two letters, I think it was. Is that what it was Brad?
Brad: I think so. It might be slightly less. I can't remember, but yes, there about.
Mark: Yes, so you're looking at probably between two hundred and twenty letters you could send out for a hundred pounds. And the beauty of that is that that's very specifically targeted information. It's not a carpetbagger approach or a land registry information. It's simply a targeted letter, a targeted list offering targeted solutions. That is probably the key bits of information that I would use with my knowledge now to advice anyone that's got a small marketing budget and that's just about to start up.
And the other thing that I would certainly recommend and something that I wish someone had told me right back at the beginning of my journey was have faith, stay positive and most importantly remain consistent. Don't keep chopping and changing, jumping around, moving from left to right, strategy to strategy, investor to investor, area to area. Focus on a specific investment type, area and marketing methods and just hammer them, hammer them, hammer them and you will start to see results. So, hopefully that helps anyone who just happens to be on a low budget.
Brad: Excellent. And Nick, an answer to your question, the podcast episode Mark referred to, hopefully will be out tomorrow afternoon. So, we'll email that out as normal when that comes in. We've also had another question from VB. "Can you recommend any good companies for writing these letters? Hand written ones please. Do you know any Mark?" We don't do handwritten letters. I don't.
Mark: We don't. We don't do handwritten letters, no.
Brad: I've got to say I don't really think - everyone talks about handwritten letters. I think if you're going to hand write anything, hand write the envelope and type the letter.
Mark: Absolutely. And then I think the company called Scribble Mail do that.
Mark: I don't know of anyone that does handwritten letters. The only thing I would recommend - so it's a completely side track, not related topic, but I will answer it now because it's been raised. One thing that we find in our marketing is that generally a printed letter and a printed envelope will get opened. What we are likely to recommend is the handwritten envelope to houses where there are debt problems. So, people maybe that are going pre-repossession post-possession. Well not post-repossessing because it's useless. But pre-repossession; when they're suffering financially they tend to not open official looking letters because they just assume it's another person chasing them for money. Those letters specifically, I would always say hand write them potentially.
But of course, if you get the information; so, if you go a list of properties that are potentially going into repossession or a list of addresses where there's debt problems then I would recommend doing something handwritten; but other than most of the people that you would write to such as landlords on the HMO Register or people that are trying to sell their property, you tend to find that they will open a printed letter. I would imagine that the cost of a handwritten letter will double, if not triple compared to what it costs for printed letter. I would say I'd rather send three letters than one for the sake of getting it handwritten. But that's just my opinion. I know others think differently.
Brad: Well it's kind of down to testing, isn't it? I think particularly with the HMO register list you invariably have the name of the owner, which is if somebody receives a typed letter with their name, it’s address to them on the envelope, they are ninety-nine percent likely to open it. So, that's the first job.
Mark: Absolutely. Getting the name is a big, big part of it.
Brad: Yes. So, John thank you as well. For those people that can't see the chat box, John also recommended a company called Ink Packed. So we got Scribble Mail, Ink Packed. And Andrea has also asked "How do you get a list of properties potentially being repossessed?"
Mark: Personally, we don't know, but there are ways to get them because we actually get them supplied to us by someone else. But, needless to say, they haven't told us how they got them. So, there is a way, we just don't know how you do. But there are people out there that do supply these sorts of leads. Sorry I couldn't help with that one.
Brad: Repo List, John is saying.
Mark: Yes, Repo List is the website where you pay, don’t you? I think you pay for a subscription but I'm not entirely sure how- I've heard some negative stuff about them, but look into them and I'm sure there's others out there. It's not up to me to say but we don't tend to deal with those particular types of deals.