With so many choices, options and strategies open to property sourcers it’s easy to become overwhelmed and quickly lose focus. In this episode Mark shows you how you can get your first deal across the line in 90s days IF you focus on the right things. You'll learn:
Get the free resource that accompanies this segment. [thrive_2step id='3318']90 Days To Your First Deal Kit[/thrive_2step]
How can you create a consistent, predictable and automated flow of property deal leads? Facebook Ads and Google Ads is how. But know the differences between the two is critical to choosing the right platform to source for the right strategy. In this episode Brad outlines the 4 foundational differences you need to know to make the right decisions on which one to choose. You'll learn:
Get the free resource that accompanies this segment. [thrive_2step id='3319']Facebook Ads V Google Ads Comparison Grid[/thrive_2step]
To follow is the transcript of the Facebook Q&A, Sourcing With Mark and In The Lab With Brad.
Mark: So this week’s question like we’ve just alluded to a bit earlier on, is at Mandeep. So again, thank you Mandeep for the question which is what’s a good process to convert a lead into a lease option? So again, just to reiterate what we’ve discussed previously, this question has come from a landlord who has responded to one of Mandeep’s marketing pitches, methods, and the landlord in their reply has come back and stated that they’re interested in renting maybe for about another year or so and then may consider selling.
Now, this is potentially going to be something that is – you’re going to come across a lot at the moment. So when you’re getting that marketing out there and you’re going to come across the same situation, we’re going to have a lot of landlord suspecting, you know, I don’t want to get into Brexit again and all that nonsense but it is having an effect on at landlords specifically about considering their options.
So what we want to do, when we get a lead like this is, we want to treat it the way that we do in Goliath which is, we want a lease option before we take on a rent to rent. Ideally, we want to have a lease option first and then we almost down sell into a rent-to-rent. Big reason for this, of course, is with the lease option, you have more control, more security. You’re locking in the price, the purchase price. You’ve got a back end gain as well as during the term gain with regards to the cash flow. And it also means that you can do a little bit more to the property in terms of cost. So they may do a bit of a better refurb or the sort of things that you’d spend money upfront that you might not necessarily do for a rent-to-rent. So how do we go into these negotiations when pitching a lease option?
Now, the best way to go into a pitch like this is to go in and explain to the landlords that you are looking for a rent-to-buy type agreement. It’s a rent-to-buy situation. So you’ll rent it in the short term and then you’ll look to buy it in the future. But what you want to do is, during your rental terms or during your tenancy, what you want to be able to do is, you want to be able to make the house your own. Obviously, you’re maybe looking to rent it out, so you’d want to refurbish it. And in order to be able to refurbish it and put the amounts of income in, add amount of funds into that refurb, you want to be able to secure the fact that you’re going to be able to buy that property in the future. So in order to do this, there is an agreement. The agreement is a lease with options purchase and then you can go into explaining that process to the landlord themselves. And so that’s the easiest way to pitch a lease option.
Now, one of the biggest objections that you’re going to come across, is going to be the objection of agreeing a price now that you are going to purchase in the future. Now, if it’s a year’s time, so in this particular example from Mandeep, he suggested that he might be looking to sell in a year, at clearly the chances of the prices going up over the course of the next year, are fairly low. I would imagine prices are going to go up that much over the course of the next 365 days and so you’re really going to have to make sure that the numbers work in terms of your future purchase. So obviously, if you’ve got the cash flow going in the short term, you want to make sure that that purchase price is still a reasonable purchase price and not full market value. You still want to be agreeing a little bit less and in order to be able to add value and make a back end gain.
But what you can also do is by agreeing a longer term. So if you agree a longer term maybe five, seven, ten years time, at what you want to do and what we do at Goliath, is we incorporate an equity share. So we will incorporate a share of whatever the property is worth more, in the future than the price that we agree now. And what that does, is it allows the seller to know that they’re going to make something at the end whilst also having the headache taken away in the short term.
But it also means that you are going to get more deals and weight. So we use anywhere between 10% and 25% equity share. You know that we’re going to get between 75% and 90% of the equity in the future and that tends to be the best way we find to convert a rent-to-rent lead or a landlord lead into a lease option.
Brad: Great stuff. Elegantly put.
Mark: Thank you very much.
Brad: Nice little system.
Mark: Okay. So in this session, session 9 of sourcing with Mark, we are going to go into 90 days to your first package deal. Now, really if you follow the system, you follow the process I’m about to summarize in 10 minutes, then you’re going to get to your first deal in a lot less than 90 days. But 90 days is a realistic amount of time for you to really make sure that you get that first one in the bag.
The key to get deal sourcing is once you got the first one, it’s a momentum. So you want to keep the marketing going, you want to keep the action being taken and you will start to find that the momentum will gather and the deals will start to come in aplenty.
So I’ve only got 10 minutes in this sourcing with Mark and needless to say, there is a whole coaching program designed around getting deals, packaging them. So this really is going to be a quick start in order for you to be able to listen to this sourcing of Mark and get cracking on finding your first deal. So, I get asked this a lot. I get asked about the best strategy, the fastest way to the best deals, the easiest way. And the real answer is there’s no easy way but there are short cuts that I’m going to try and get through to you in the next 10 minutes and I’ll just squeeze as much as I can into this. But clearly, if there’s any additional questions which I’m sure there will be, for all you listeners out there, get into the Facebook group and ask away. You can ask those questions in the Facebook group and I will come back to you or someone in the group will come back to you and help you as much as we can.
Now, what I’m going to do in this, like I said, there’s so much to go through. There’s so many different strategies you can source for lease options, below market value, service accommodation. But the for the purposes of this sourcing with Mark, I’m going to focus on probably the most popular strategy at the moment which is rent-to-rent.
And that brings me on to my first point really. The first point is, you need to focus on one specific strategy. The reason for that is you want a consistent message in your marketing in order to be able to become more successful. Now, you will get deals that aren’t in accordance with your main strategy. And so for example a rent-to-rent deal might turn into a lease option deal. It may turn into a below market value deal but the point of this statement is that by focusing on one particular strategy, the messaging is going to remain the same. The consistency is going to remain the same which means that the results are going to come far quicker. One of the biggest mistakes you can make is to try and focus on every strategy, putting out a marketing message that is based on finding every single type of deal. Because what it will do is, dilute your message and in diluting your message, you’re in effect becoming a jack of all trades, master of none. The message just doesn’t really specify that you’re a specialist in any particular area and you’ll just struggle. You will struggle. And I can speak from experience when I first started sourcing, I did exactly that. I tried to source for every strategy under the sun and it is hard because you’re not being able to deliver a consistent pitch and it just makes it a lot more difficult. So focus on one strategy. That’s the first point.
Now, the second point is focus on one area. Now, there are sources that try -- source in multiple areas across the UK. They chase the area that people are telling them they want to source in. And what happens is, they end up trying to send marketing material out to different parts of the UK. Now, as your sourcing business develops and as you become more okay with the marketing strategies, the different types of things that you can do to find deals, you really don’t want to be doing that until you’re more advanced. At the beginning, you really do want to focus on your area and ideally your local area because you want to be going out and viewing these properties. You want to be going out and honing in your pitch. You want to be practicing with real life people in your area, because as those deals come in, they will be much easier to keep for yourself, of course, if you’re going to cherry pick or if you want to package and sell them again. You know the area, it’s just much easier to sell a deal that you know the details on.
So, those are the two points. Focus on one strategy in one area, so I can say, this is going to be rent-to-rent. So the easiest and quickest way to get a rent-to-rent deal is going to be downloading the HMO register, the House of Multiple Occupation Register in your gold mine area. Now, the way to do this is you can approach your local council and first of all, you want to go to a website called whatdotheyknow. So it’s whatdotheyknow.com if I remember rightly, and whatdotheyknow.com is a platform where freedom of information requests can be made and then those requests are publicly available. So, just check that in your local area, someone hasn’t already asked for that list because if they have and it has been provided, then the list will already be live. It will already be available for you to download. It just cuts down a lot of time.
If the register isn’t available, you have two options. One, you can download it via the whatdotheyknow website. You just pop in a freedom of information request and download it and put it that way. Now, I would recommend against this. There are so many people doing rent-to-rent now or similar strategies, that if you download that list, it makes it available to everyone, then just follow the process I’ve just stated. So, what you want to do is you want to download, you want to contact the local councils. You want to contact your local council in your gold mine area and request the HMO licensee address list and you want the list of HMO licensed addresses and then the licensee addresses, where possible. So you want to be writing to them. Literally just writing for that information under the freedom of information act and they should provide you with at very least, a list of the addresses but hopefully what you’ll get is a list of licensee holders.
So once you’ve got that, what you then want to do is send a letter, a direct mail letter to every single landlords on that list, advising them that you’re looking to offer them a guaranteed rent service fixed for up to five years and etcetera, etcetera, etcetera. And you will start to get phone calls from that and then it’s quite simple once they phone through, you speak to them, you convert them and then you get your first rent-to-rent deals. That is really the quickest way to get your first deal.
The other quick way, the other quick win is phoning private ads. So, items such as Gumtree, Prelook, UK classifieds, there are loads. In the Facebook group I’ve actually put a list of 101 free classified sites based around the whole of the UK. So you can go and have a look at those. And then what you want to do is you want to look at the adverts, you want to look for specific adverts that meet your criteria and then you want to cold call them. Now, some people teach the strategy where you send them a text, you write them an e-mail, you wait for them to respond, you go back and forth - back and forth and then you have a phone call.
Personally, if you want the quick wins and the purpose of this sourcing with Mark is to get you quick wins, just cold call them straight away. Ask the permission to see if it’s okay to speak to them when you first speak. So if I was to call a landlord off the back of a private ad on a completely cold call basis, I would say I’m just calling with regards to your advert. Is it okay to speak at the moment? So they’ll then say, yes or no and then you can arrange a callback or you can go straight into your pitch that way.
And then, one thing just to remember when you do follow up, when you do cold call is follow up that cold call with an e-mail. So what I’ll always end the call with, is what I’d like to do, is I’d like to just send you an e-mail with a load of information about what we’ve just discussed just for you to consider. I appreciate I’ve caught you off guard, have a think, have a look through and then what I’ll do, is I’ll call you back again in a few days time. Follow up e-mails perfect and then make sure that you follow up with that phone call. So that’s number two, private ads. So you’ve got HMO register, then you’ve got private ad cold calling.
Now, this one's going to make a lot of you feel uncomfortable but I can tell you now it really does work and that is board knocking. Knock on house doors where there is a board outside, advertising that it is currently available to let. So we’re looking for properties that are advertised available to let. Now, the reason for this of course, is that in a rent-to-rent situation, the easiest people to sell a rent-to-rent product to or rent-to-rent service to, are landlords whose tenants are outgoing. They’re going out, they’re leaving their property. Now, you may be thinking, well, wait a minute, I’m going to knock the door and it’s going to be tenanted and that is correct. So what you want to do is you want to make sure that that property and when you speak to that tenant, remember that tenant is moving out, so they’re not thinking that if there’s any risk of you moving in and giving them notice. They are already moving out so they’ve got nothing to gain or nothing to lose by giving you the information that you require. So you can ask them, do they deal directly with the landlord? i.e. Does the landlord manage the property themselves? And if they do, of course, we can get the landlord contact details or at the very least, ask them to pass your details on to the landlord. Don’t tell the tenant too much about what you’re doing. Just say you’re very interested in the property and you’d like to speak to the landlord directly. Would you mind passing their details on? And then get the landlord’s callback.
Now, if the property is managed by an agent, so if the property is managed by a letting agent then what you can do is on the tenancy agreement, you will get the landlord’s name. The landlord’s name by law has to be on that tenancy agreement. So just even just getting the landlord’s name, can often just mean that you can write a direct mail piece that’s going to go to the house, to that name and it’s unlikely to be opened. If you sent one to the landlord, the agent will open it and it will get binned but if you send one to a named person, then they’re less likely to open that letter.
So I’m very conscious of time, everyone. Sourcing with Mark is meant to be 10 minutes. We’re already about 11, so what I’m going to do is just quickly summarize and hopefully you found this useful. It really is a bite size snippet into sort of coaching in how to get that first deal. But in conclusion just to summarize, focus on one strategy in one area. You don’t want to become disheartened if nothing comes within your first few days, within your first week. Often when I coach sources, what happens is they don’t get any quick wins within the first few days and they get disheartened and then they start diverting onto other areas, onto other strategies. But you need to be consistent in your approach, you need to be determined in your message and what will happen is, you will start to see those leads coming through. Keep practicing. Keep practicing. Keep the action going. Keep learning. Keep adapting. Keep improving that pitch and obviously once that’s all nailed, the deals will start to flood in and that I promise you. If you keep that what do they say, focus, focus on one course until successful, think it is. So that’s what you want to do. Stick to one strategy, one area and then keep going and the results will start to come. And just remember, enjoy it! Happy sourcing.
Brad: Hi, and welcome to In the Lab with Brad. Facebook ads versus Google ads. What’s the difference and which is best? There’s been a lot of interest lately in using internet marketing as a lead generation platform and channel. Now, in particular, there seems to be quite a lot of interest in both Facebook ads and Google ads and rightly so. They are two of the most powerful advertising platforms that ever existed and in my businesses outside of property, I’ve been using Adwords since about 2006 and it’s consistently delivered highly targeted leads that have turned into clients for 10 years now.
Now, inside of Goliath, we focus much of our lead generation efforts to both platforms. So we absolutely believe in it. Now, for property sourcers, it represents a massive opportunity to create a similar tap like flow of leads that works almost on autopilot when you get it right. Now, it does take work to get it going and to learn how to most effectively use these platforms though. So you have to be patient and commit to them. Now, most people can’t be bothered though, to learn what it takes or they try it for five minutes and if it doesn’t work for them, they lose money and they say things like Facebook ads don’t work or Google ads don’t work. But there in, I believe lies the opportunity for those that do take the time to educate themselves and go through the ups and downs involved in trying to make either Facebook ads or Google ads work for them.
But which one do you choose? Facebook ads, Google ads? Which one is better? The answer, annoyingly is, it depends. So to help you make the decision for your business on which platform is best for you, we’ll need to understand the differences between them. You’ll then be informed as to which one is right for you and the strategy that you’re sourcing for. So here are the four foundational differences between Facebook ads and Google ads.
Firstly, they have two very different targeting systems. Now, for Facebook ads, you choose the audience. Facebook allows you to target this audience very tightly by interest, demographic, location. It knows this because you, the Facebook user, give it this info either in your profile or in the content you post, you like, you comment and you share. I actually think for a lot of people, it would almost be quite shocking as knowing as to the level of detail that Facebook knows about all it's users. So by choosing the right targeting options, your ad can be seen by exactly the audience that you specify.
Google ads on the other hand, shows ads based on what people are searching for. So Google doesn’t know users like Facebook knows it's users. It doesn’t have the same detailed level of data about users' interests and demographics. So ads are actually triggered by what keywords people search on.
So the second foundational difference is, our ads are created differently. So Facebook ads are created around what people are interested in. So you’re targeting people based on who they are, rather than on Google which is based more on the type of information they are looking for. The question they want answered or the solution to a problem. So let’s take an example to illustrate the point. Let’s say that we wanted to source deals for a rent-to-rent strategy. We were focusing on generating leads from landlords. Now, if I was in the Facebook ads interface, creating an ad to target a landlord, I would be looking to choose targeting options like men aged 30 to 65 in Leeds, who have liked a page or have an interest in landlord insurance. Now, that might be a good targeting option. Actually, only testing that campaign now, will really give me the answer though. Now if I want targeting – if I want to target landlords on AdWords, I would be looking to create ads that are triggered when someone searches for a keyword like, guaranteed rent scale.
So the third foundational difference is user intent differs wildly on each platform. Now, Facebook ads enables you to advertise to people who aren’t necessarily searching for what you’re offering. They’re minding their own business. I suppose in the case of us property types, we will be watching a video someone spraying and expanding insulation foam into a cavity wall. But they then happen to see your ads. So they’re on Facebook, they happen to see your ad when it passes through their news stream. They weren’t searching for your product or service but they still get exposed to your ad. So Facebook ads is a great way to generate awareness and interest in your product or service.
Now, if people don’t know you exist, they can’t be interested in what you have to offer and they won’t therefore be searching for it. Now, I think this is where Facebook ads is actually a gold mine for property sources offering creative strategies, a solution to sellers and landlords problems. For example, your average one to five property landlord won’t have been exposed to understand how rent-to-rent deal works. In other words, he doesn’t know the solution you can offer him even exists. If he doesn’t know it exists then it’s almost certain that he won’t be searching on Google for it.
Now, Facebook ads allows you to put an ad in front of him that makes him aware of the solution, he previously didn’t know even existed. So when it comes to Google ads, people are on a mission. They are looking for something specific and want to find what they’re searching for. They are intent on finding a specific answer to a specific question or problem. They’ve got an itch and they need it scratched. So you, as an advertiser, could show an ad that best matches their search intent. So, if you were targeting landlords looking for a guaranteed rental income scheme, then your ad needs to speak to them direct and direct them to a page on your website with specific details on a guaranteed rental income scheme. Why? Because the searcher is specifically looking for information on a guaranteed rental income scheme.
Okay, fourth and final foundational difference. Cost per click differs on each platform. Now, another difference between Facebook ads and Google ads is the cost per click on each platform. On AdWords, you can spend up to 100 pounds per click in really competitive industries and markets. But on Facebook you can pay a tiny fraction of that and can even get as low as 10 pence per click depending on your target and your click through rate.
Now, in my experience, the cost per click tends to be lower on Facebook ads than AdWords. So as a general rule, you pay a lower cost per click on Facebook than you would on AdWords. However, and here comes the big but, the metric you need to measure is actually the cost per acquisition or in the case of the property source, are the cost per deal. So stick with me here as we do some simple math. Let’s say that the cost per click on Facebook is 25 pence and for that you get 100 clicks on your ad. And that then results in one deal. So you got 25 pence per click, you get 100 clicks and it results in one deal. Now, that’s a 1% conversion rate, so closing one deal has cost you 25 pounds.
Now, let’s say that you convert clicks to deals at 10% on AdWords and your cost per click is a pound. So that’s 100 clicks for 100 pounds and 10 deals, so that’s a cost per deal of 10 pounds. So the cost per click on Facebook was way cheaper than AdWords but the cost to close a deal on Facebook was much higher than it was on AdWords. So you could come to the conclusion that AdWords is a more effective platform due to the cost, the lower cost to close a deal. So just as a side note though, if you’re wondering why the difference of 1% cost per deal on Facebook as opposed to 10% on AdWords then just think back to the search intent explanation that I made earlier.
So there they are. The four foundational differences between Facebook ads and Google ads. So which one is best? I here you screaming. It really depends on which strategy you’re sourcing for and how effective you can run your campaigns. My advice to you is to pick a strategy you want to source for and carefully think about who you are targeting. Ask yourself the question, are they searching for a solution to their property problem or do they not know it exists yet? And then pick your platform and dive in. So as an addition to this segment, this In The Lab with Brad, I am offering you a Facebook ads versus Google ads comparison grid. So it will go through some of what I’ve talked about now but it will also go through so other comparison points as well so you’ll get a much clearer picture of the more differences other than the four foundational once that I’ve given you here. So you can get by going to goliathsourcingacademy.com/session9.