If you spend five minutes driving down any residential street, chances are you’ll pass several homes in foreclosure. It’s no secret that foreclosures are everywhere, and there’s no shortage of information about how to buy them. You may be aware that there are some great deals on “pre-foreclosures” – homes still in the process of being foreclosed. But you probably don’t realize how time intensive finding and purchasing the right deal can be – especially if you’ve never done this type of investing in the past.
You’ve probably read some excellent ideas in ETR on how to stand out from the crowd of investors competing for the same properties, as well as some nifty little tricks on how to mail letters of interest to sellers that will get opened and read.
I’ve been investing in real estate for 20 years, and I’ve been able to make millions using many of those strategies to find potential deals. I’ve also used time-tested techniques borrowed from direct marketing. However, when I saw the current down market coming, I knew I had to figure out a new way to sift, sort, and screen through the imminent flood of thousands of foreclosures.
What I decided to do was throw out conventional “investor” thinking and take a strict marketing approach. In other words, if I were trying to market a product to a targeted group of people, how would I do it – and how could I automate it?
What I came up with was a method of attracting pre-foreclosures that has revolutionized the way investors can find and profit from them. I call it the Automated Foreclosure Finder.
It completely reverses what every other investor is doing. Instead of making “cold” contacts with people in foreclosure, you use my finder strategies – and then sit back and let them contact you before they go into foreclosure.
This not only gives you a jump on investors who rely on public records or paid listing services, it also eliminates the grunt work. It sifts, sorts, and screens out the bad deals, so you wind up spending your time only on the best deals… deals that are delivered to you automatically.
Here’s how it works.
I use direct-response marketing methods to create “finder strategies” – ads that drive qualified prospects to me. I use classifieds, business cards, flyers, mailers, yard signs, and even Google AdWords.
Like all good direct-response advertising, these finder ads:
- Have a compelling headline to capture my prospects’ attention
- Make a big promise to create interest.
- Ignite a desire to find out more.
- Tell my prospects exactly what action to take
The key to making these ads work is to make sure they offer helpful information to people facing foreclosure. People facing foreclosure experience a wide range of emotions. They can be angry, afraid, depressed – even ashamed. Most of them will be looking for ways to stop the foreclosure and save their homes. They want a solution to their problem… and they want it fast. The only thing they’re interested in is ending their pain. The finder ad should do that for them.
Remove Psychological Barriers
To automate the prospect-finding process, all of my finder ads direct prospects to a 24-hour information line. This is a technique that smart marketers have used for years. Your finder ad should clearly state that they are calling a free recorded information line. This makes calling a non-threatening action for the prospect to take. They know they don’t have to talk to anyone when they call. They don’t have to be afraid of being “pressured” into anything. It’s risk-free, so anyone who is even slightly interested will make the call.
The message they hear when they call, again, follows tried-and-true direct-response guidelines. My message, written by a professional copywriter, is empathetic to their situation. It gives my callers seven options they can take to stop their foreclosure. It also gives them specific actions to take, depending on where they are in the foreclosure process. Then it qualifies those prospects for me.
After presenting all the options for preventing a foreclosure, I offer them one more. The option that if none of the solutions I have suggested work for them, “I may be able to buy your property” and prevent the foreclosure. Then my message states the questions I need answered before I can consider purchasing their home. Questions like:
- How much is owed on your mortgage, and how many missed or overdue payments are there?
- What is the location of your home – as well as its age, square footage, and the number of bedrooms?
- What is the condition of the home?
- Do you have an appraisal for the home?
- Has a “Notice for a Sheriff’s Sale ” been sent?
- Has the bank sent a list of additional expenses owed to them for the foreclosure process?
The first thing this message does is give them an understanding of the reality of their situation. The second and most important thing it does is help gain their trust. It also helps to screen out the deals that would not work, or that I don’t want, and leaves me with the best of the best to choose from and pursue. I would rather talk to 20 qualified prospects than 100 prospects I have no insight into.
Position Yourself as an Advocate
Although the finder ad is designed to attract people long before they show up on any foreclosure lists, some of the people who respond to you will have had some kind of run-in with another investor. That investor may have left a bad impression – the impression of being solely interested in taking the property for profit. That’s why it’s important to position yourself as an advocate, not as an “opportunistic” investor, in your finder ads and recorded message.
By providing your prospect with a number of potential, step-by-step solutions for them to stop their foreclosure – and only briefly mentioning the possibility that you might be able to buy their home – you are 99 percent more likely to be perceived as being on their side.
Putting It All Together
A sample finder strategy used in a classified ad might look like this:
Free Foreclosure Help
Learn What to Do If You Are at Risk
FREE RECORDED MESSAGE
Call anytime, 24 hours a day, xxx-xxx-xxxx
An ad like this drives people to your recorded message. The recorded message educates them, screens them, and provides a way for them to contact you or request you to contact them. The ones you ultimately do contact are highly qualified. You can get as specific as you want with your message. The beauty of it is that this method will sift, sort, and screen the best possible deals for you, every day, 24 hours a day, seven days a week.
Don’t Forget the Internet
Another thing I do is drive prospects to a website that contains the same helpful info as my recorded message. From the website, I can capture their e-mail addresses. Then I send them a series of automated messages that drip out professionally written e-mails that repeat the helpful information and also remind them that I am here to help.
This method saves so many wasted hours that, in itself, that would be enough for any investor to be excited about it. But the fact that it drives deals to your door before other investors can even get wind of them makes it unique… and highly profitable.[Ed Note: Dean Graziosi is a real estate investing expert, teacher, and author who began investing at 18. His first best-seller, Totally Fulfilled, explains his unique “core” approach to optimal results, success, and fulfillment in all areas of life. His second book, Be a Real Estate Millionaire, has already appeared on best-seller lists of The New York Times, The Wall Street Journal, Amazon.com, and USA Today. For an ETR-reader-only special on this book, go here.