I can’t overstate enough how important the right type of marketing is when it comes to finding really great deals… especially in this market.

So what is the right type of marketing?

In order to understand how to choose the correct marketing strategy (defined by the strategy that gets you the exact type of deal you are looking for at the lowest cost), and where most beginners make huge mistakes, imagine what it’s like to be really thirsty.

Your mouth is dry, your head is pounding, and all you want is an ice cold glass of water to quench your thirst.

There are a lot of ways you can go about getting the glass of water you want and need so badly.

You could walk over to the refrigerator and put some ice and water in your glass and drink it.

Another way would be to buy a plane ticket and fly to Niagara Falls and plunge your head into the massive rushing river of water in order to get the drink you so badly desire.

After all, if a glass of water would be good, then is must be exponentially better, and worth the extra money, to have thousands of gallons of water rushing at you to choose from.

The water in Niagara Falls might not be as cold, as clean, or as easy to drink as the water from your refrigerator.  It might even make you sick to drink, but there are a million glasses of water in Niagara Falls to choose from.  So if you can get that type of flow, it must be better than just taking the simple glass of ice water that you need right?

This seems a little ridiculous, but this “more must be better” logic was exactly what I was sold when my partners and I first started running marketing campaigns years ago, and it’s what I see investors doing all the time.

Why not have less but better.  I would much rather have the exact type of leads coming in, exactly when I need them, for a low cost (a simple glass of ice water when and where I want it).

This is why I’m such a huge advocate for new investors to start with bandit sign marketing.

I share, step-by-step, exactly how to implement a successful bandit sign campaign in my e-book on the topic here.

A handful of well placed bandit signs can lead to the exact type of seller you want to talk to (typically only motivated sellers call bandit signs) and you can turn them on and off pretty easily and manageably at a very low cost.

Here is an example of a spectacular cash-flowing deal that came as a result of bandit sign marketing.

3602 Wellington Ct, Hazel Crest, IL

How I Got the Deal

In my e-book, I discuss how to set up the phone number (google voice) to use as your bandit sign phone number and what to say on your voicemail recording.

I always try to answer each call, but when I received the call from this seller, I was tied up, so the call went to my voicemail.

The seller of this deal was from Haiti and had a very strong accent, so I struggled to understand his voicemail, but called him back and discovered that he called me because of a bandit sign I had put on a light pole a block away from where he lived.

He had this home for the past several years and had lived in it and rented it off and on throughout that time.

He owned this home along with a few other rentals and was trying to sell off everything and was in a hurry.  He told me that he had listed this home, but several contracts had fallen through and just wanted to sell it for cash quickly.

Like I mentioned in my last article.  The key to purchasing properties correctly is to listen to what is important to the seller and provide what they are looking for.

The Numbers

He told me that he had had two buyers at a purchase price of $65,000 and $55,000 fall through because they were not truly qualified for the purchase after placing it under contract.

He said that if I could purchase it quickly, with cash, he would sell for $35,000.

There is an added level of risk in removing all contingencies, including a home inspection, however if your purchase price is low enough to account for worst case scenario repairs, this can often be a great strategy to win a deal.

We agreed that I would remove all contingencies, but would need to purchase the property at $24,500 in order to offset my risk of any unplanned rehab that might need to be done after closing, and I agreed to close within a week.

The Deal Performance

I signed the contract and purchased the property a week later.  Luckily there was very little maintenance that needed to be done in order to get the property rented.

The home is a small 3 bedroom ranch in a working class subdivision with a detached 2.5 car garage.  I placed a tenant in the property a few weeks after closing for a rent of $1,400 per month.

As a side note, I purchased this property with my self-directed IRA as the owner.  This allowed me to make the purchase using retirement funds that were readily available and all of the income from the property goes into my retirement account tax free as well.  The company I used to set this up is Midland IRA.  I will explain how you can setup a self-directed retirement account in a separate post.

This deal closed in the spring of 2016 and I have had the same tenant in the property ever since. The property has produced enough cash flow to pay for the purchase after just over two years, and, due to substantial appreciation over the past few years, I currently have an offer to purchase the property for $75,000 (the profit on this sale would also be tax free due to the IRA ownership of the property).

Deal Summary

There are a lot of factors that made this a great deal, some of which can be controlled and others are market dependent, but none of it would have been a possibility if I hadn’t posted the bandit sign that allowed me to get in front of the seller.

It can be easy to get overwhelmed with all of the different components of real estate investing.  Don’t add to this overwhelm by paying for the wrong type of leads.  Get super intentional about the type of deal you are after and the type of marketing that will lead to the right seller.

Nothing happens in real estate investing until you get a deal.  So I always recommend spending as much energy on this task as possible, because when you find a great deal, it makes a the other components of investing seem a lot more manageable.

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