Real estate prices are currently 30 to 40 percent off their highs from several years ago. In a normal market, these discounts would be fodder for real estate investors. The key word is “normal.” The prices that were being asked several years ago were at the very top of the real estate cycle. That bubble top burst a little over a year ago. What this means to an investor is that maybe the reduced prices don’t represent that much of a deal, yet.

Depending on the location of the property, there may still be room for the prices to drop. Southern California and Miami properties were at their zenith in the price cycle a few years ago, so a 40 percent reduction just brings prices down to a more “affordable” level, only. What the investor has to look for today, is a property that can be purchased for a 20 percent discount off the current asking price. Bank owned, foreclosed properties are a good source for these types of deals, or pre-foreclosure and short sale properties that are on the market.

Cash is always king in real estate. It of course, doesn’t always have to be your own cash. Other people’s money is desirable, either in the form of equity partners, hard money loans, personal loans or institutional loans. There are many real estate investing clubs or networks that will have their own sources of partners, loans and lenders. These networks are excellent for investing in properties located throughout the United States. It’s what one network called, “armchair investing.” The larger networks have all of the infrastructure established in various locations where real estate investments are best found. Local real estate agencies, local property management services, and fellow network investors in the area create a comforting environment within which to begin investing.

So, once an investor has determined how he is to fund his investment in real estate, he can begin to search for the right investment property as to price and terms. Either funding the purchase solely, with a partner(s), or with a loan, the investor can concentrate on negotiating the best deal.

The “Real World”

After you’ve read the above scenario know just two things right now:
Many new investors using direct mail without guidance sometimes experience these types of results and get discouraged from using direct mail again. These individuals will tell you, “oh, I tried mailing out letters and postcards once but I didn’t get many (or any) deals”.

Direct Mail Finds Truly Motivated Sellers!!

Now, this latter statement is what I hope by the time you finish reading my points will convince you that a well thought out direct mail plan is extremely effective but takes some thought on your part. You need to be more sophisticated than just throwing darts in the dark hoping you hit something. Sure, the majority of your letters/postcards won’t be responded but did you know that a success rate of substantially less than 1½ can still make direct mail very profitable for you in real estate. Read on my friend!

What Makes A Great Direct Mail Campaign?

Now let’s get into what you really need to know in starting your direct mail campaign. Get a organized game-plan together on how you are going to make sure that you get as many motivated sellers calling you as you can handle!

Define Your Target Market

You need to know what you’re hunting so to speak. Just an “I Buy Houses” message to your market doesn’t come close to what you need to do in direct mail. There are many, many ways to make money in real estate and finding the truly motivated sellers with direct mail means your message should be reflective of the target market you are seeking. For example if you are targeting pretty house properties that are in pre-foreclosure then included in your message the seller doesn’t need to know you take over properties with tenant terrors or that buy junker houses. They need to be informed that you can possibly take over their payments and know how to find tenant buyers that will help resolve their situation so they can move on with their lives. Define your target market because the message you send needs to reflect accordingly.

Generate Your Mailing Lists From Quality Sources

I’ve seen many types of mailing lists that weren’t worth the paper they were printed on. If you’re keying into pre-foreclosure properties then make sure the source providing the information is reputable and you can test out on a month or two basis before being tied into a one year contract or paid up front fee. Later when you find out the information is out-dated and inaccurate then you’re stuck.

Another example is you may be into finding absentee owners. These are a great source of deals if done correctly and basically these are owners of a property where the tax bill is being sent to an address different than the subject property. Ninety nine times out of a hundred that is a prime target for a tired landlord or junker deals to be made. However, it can be quite frustrating when you find out the information you purchased hasn’t been updated for over a year on the property tax records. Ouch! Come to find out after doing a little investigating almost half the properties you would have been sending letters/postcards to changed ownership. You paid for but didn’t receive quality information. Make sure before you buy mailing list or property tax information that you have a chance to do a test basis on some of the material. Most all reputable companies selling quality information will have no problem sending you a small bit of test data to look over.

Don’t Stop At One Mailing

This is a key principle that many investors seem to never grasp the concept of. If you have fulfilled the prior two steps in securing quality mailing list material and you know exactly your target market, then send them multiple mailings. I have my software system set up where for example any category that I key into will receive letters and postcards from me. The text messages will be incremental in nature building up and playing on different angles and ideals trying to prompt them to call me. Sure, I’ll get most responses from the initial mailing but many times it may take a little bit more persistency to get the seller persuaded. I’m glad I didn’t stop with one seller sending out only five letters. On the sixth letter we finally put together a deal and netted me over $8,000 quick cash. With another seller it was actually over a year of mailings before he came around but the deal got done.

Let Your Letter And System Pre-Screen The Sellers

Time is my most important commodity. I don’t have the time to talk to unmotivated inflexible sellers wanting all cash and retail value for their property. You don’t and won’t have the time to waste either with these types of sellers. Sure, some will get in under the radar but for the vast majority of the sellers that receive your message they will know a few things very quickly. You are an investor and expect to make a profit and yes you have many creative ways to buy properties. In fact you can probably even close within 48 hours if you run through your due diligence checklist. However, the message in your letters/postcards needs to state that if they need all cash and full retail value not to call you. However, if they have some considerable degree of flexibility in either the cash price or terms then to call you as soon as possible. You need to be seeking quality of sellers and not quantity of sellers fielding fruitless phone conversations.

Direct Mail Is A Investment…Not An Expense

Make no mistake it does cost money to initiate and maintain an effective direct mail campaign. When you put together the cost of postage, letters, envelopes, postcards then you’re talking substantial monies dedicated to this marketing medium. In a prudent investor’s budgetary considerations these are costs that most like to consider. When you’re experiencing success and know how to effectively secure quality mailing lists or generate them yourself then you soon change your mindset that you simply can not spend enough on postage. Let me try to explain from the sense that just because you don’t like to spend gas for your car should mean that you don’t ever put gas in it. If you don’t realize that fact then you aren’t going to be going anywhere fast and you can make the same comparisons if you don’t consider direct mail costs as an investment in your real estate business.

Summing It All Up

Direct mail is one of the best ways to find motivated sellers or rather have them find you but take some time and forethought from thought to finish on what you’re trying to accomplish. Your goal is to find truly profitable deals and the means you go about doing this are contingent upon your target market, quality of the mailing contact, multiple messages to same contact, pre-screening ability, and finally your commitment to direct mail and an investment in your real estate business. Be organized and focused in your direct mail campaign and soon you too will be finding all the motivated sellers you can handle!

Offer a Reasonable Earnest Money. You cannot present an offer with a $50 earnest money and expect a real estate agent to take you seriously. If you are concerned with losing your earnest money, consider using a real estate promissory note. In the US, real estate brokers and their salespersons (commonly called “real estate agents”) assist sellers in marketing their property and selling it for the highest possible price under the best terms. When acting as a Buyer’s agent with a signed agreement (or, in many cases, verbal agreement), they assist buyers by helping them purchase property for the best possible price under the best terms. Without a signed agreement, brokers may assist buyers in the acquisition of property but still represent the seller and the seller’s interests.

Offer a Short Closing Date. Another way to get a real estate agent to take you seriously is to offer a fast closing. Nothing makes real estate agents salivate more than the thought of a commission check in ten days. If the real estate agent has another offer presented to him, he will usually advise his client to take the offer with a larger earnest money and faster close than an offer which is higher in price.
While some people may refer to any licensed real estate agent as a real estate broker, a licensed real estate agent is a professional who has obtained either a real estate salesperson’s license or a real estate broker’s license.

Insist on Presenting Creative Offers in Person. If you present a creative offer to a real estate agent, it will not be represented to the real estate owner in the same enthusiastic fashion. As stated above, real estate agents do not like creative offers – they like conventional offers from solid real estate buyers. If you want the real estate owner to hear all of the great benefits of your offer, insist on presenting the offer in person.
Real estate agents are in the game to make money, just like anyone else in any other business.

In consideration of the brokerage successfully finding a satisfactory buyer for the property, a broker anticipates receiving a commission for the services the brokerage has provided. In North America a commission in the 5% to 7% range is considered “standard” for residential real estate and is typically paid by the seller at the closing of the transaction. Commissions are negotiable between seller and broker. The commission could also be paid as flat fee or some combination of flat fee and percentage, particularly in the case of lower-priced properties, vacant lots, or other unusual real estate.
If you can offer the real estate agent an incentive to make money out of the transaction, you will get his cooperation. If you present an offer which does not permit enough cash to come out of the deal to pay the real estate agent, why would he cooperate with you? If you present a lease/option offer on a listed real estate property, how will the agent receive a commission? You need to find a way for the real estate agent to get paid, even if you pay him out of your own pocket.
Do Your Own Comps. Sometimes you will get the opposite of an uncooperative real estate agent – an overzealous real estate agent. Be suspicious of a real estate agent who tells you what a deal you are getting on a real estate property. If it is such a good deal, why didn’t he buy it? Don’t take his word as to the value. Ask for a printout of comparable sales (not listed real estate properties). If a comparable sale shows the same square footage as the house you are looking at, take a drive by and see if it is accurate. Do your own assessment of real estate value.
Don’t waste your time filling out a contract offer until you have preliminary approval. Most real estate agents are not this formal and will take any offer in writing to the seller. Simply summarize your offer in writing and fax it to the listing real estate agent. Once you have an oral approval, then take the time to fill out a contract and an earnest money check. Another real estate buying resource is a buyer’s broker. Unlike the typical real estate agent, buyer’s brokers work exclusively the real estate buyer. The buyer’s broker can be paid directly by the buyer, or can be given a portion of the commission earned by the real estate property seller’s agent. The payment arrangement is usually determined up front when you are negotiating with the real estate buyer’s broker.

There are several things that can cause real estate trends. This can be anything from changes in the economy to rising interest rates and much more. There is no way of saying for certain if real estate trends will come and go. Rather,it is something that you must simply deal with as it comes up. These trends affect everybody involved in this industry. This includes general house owners, buyers and sellers, mortgage companies, real estate agents, and many more.
For this reason, real estate trends are always watched closely. This way, those who are involved know how to deal with these trends and can in turn handle them in the right manner. Following are the three common real estate trends to look for in the upcoming months.

1. Keep an eye on how the internet changes the real estate market in the months to come. The internet has changed several industries over the years, and this is certain to continue to take place with real estate.

2. Agents and brokers are looking for new ways to deal with upcoming generations. This is the trend that is going to change the industry in many ways than one.Simply put, the younger buyers of today are not like they were in the past.

3. Multiple Listing Services are taking a new form, and have seen several changes. Keep this trend in mind and this is something that is going to affect real estate agents in specific. These are just three real estate trends that may rear their head in the upcoming months. There are certain to be several more as well as some that are generalized in nature.

The bottom line is that trends will always be observable in the real estate industry. This is not going to change anytime soon.Hence no matter who you are, getting used to these is very significant.