4 Ways You Can Start Your Real Estate Investing Business With No Money Out Of Your Pocket.

1. Create a Lead Generation Business

The backbone of any real estate business is lead generation. It doesn't matter if you're a real estate investor, Realtor, a house flipper, or a mortgage broker, you need a constant stream of leads to create new business.

Most real estate professionals struggle with lead generation.

According to some research, the National Association of Realtors (2017 Annual Report,) the average Realtor completes 11 transaction annually. The average transactions among the top 1,000 Realtors in the county is 190, with the top three averaging 1,500 transactions.

That's an enormous difference. So why do the top agents get the majority of the business? Because they're excellent at generating leads.

So where do you fit in? Create a lead generation business that links motivated sellers and real estate investors and/or real estate agents together.

Now there are plenty of online lead generation services such as Bold Leads or Market Leader and others, but If you don't have a lot of money to start with and most of us don’t, emulating a business model like or isn't going to work. They have massive online advertising campaigns to find leads from all over the country.

But you can beat them at the local level. Here are some recommendations on how to start a lead generation business if you don’t have money to invest.

1. Find Agent-Clients FIRST

Make sure you find a market to sell to before sourcing the product. Find agents on Zillow, Redfin, etc. and call them up. Ask them if they'd be interested in more leads. Create a database of at least 100 agents interested in buying leads from you.

2. Find Motivated Sellers

a.) Direct Mail:
Direct mail campaigns WORK. The problem is that you need to have some money to begin mailing potential leads. As real estate investors, especially getting started in this business, money is usually a problem. But when you have some money saved up direct mail can get people to call you! Getting people to call you is a great thing! If the person on the other end is calling you then they have taken the first step and are automatically at least somewhat motivated. When you have a motivated seller you are a lot closer to having a potential deal.

Now where do you get these leads? Well, from a number of sources (which can also generate general leads). You can get leads from your local county recorders office and search for notice of defaults (pre-foreclosures), local paper, list service providers, MLS, probate court, there are tons of ways to get leads that would be great candidates for a direct mail campaign. After you get this information you can get phone info from a company called Batch Skip Trace. 

It is also important what type of advertising you use when doing direct mail. Do you send a postcard or an envelope? I would try both and see which gets a better response. When using an envelope be sure that everything on the envelope is hand written. This makes the letter more personal and more likely to be opened.

You can hire someone to do this for you. A great source would be a college student and have it be a paid internship. Of course they can do lots of other great things for you besides addressing envelopes as well. In a recent conversation with another investor he mentioned something that blew me away. If you know a particular home that is going into foreclosure and you want to target the specific home. You can go to Wal-Mart I believe and make a personalized postcard. You can even put a picture of the home on the front and have it say “I buy homes just like this”. Now if that won’t get your phone to ring I do not know what will. Obviously you cannot do this to the masses but if you can target specific homes this may be very useful for you.

After you get this information You can then get addresses and phone info from Batch Skip Trace.  

b.) Bandit Signs: When I first started in real estate investing, I almost gave up because I could not generate leads. After putting up bandit signs and taking them down each weekend, I was not only exhausted, but I did not get any quality leads. I had a few calls, but it was nowhere near the amount of calls that I had wanted or thought I would receive. Now, that is not to say that bandit signs do not work, because they absolutely do!

Bandit Signs do work. The success you will receive using bandit signs depends upon location, size, reach, and content.

Location: Your signs need to be where people driving will actually have a chance to read the sign, not just see the sign. I have paid people to put up signs for me and I have never been as mad as I was when I was driving and saw one of my signs on the side of a 55 mph road. There was no stop sign, no stop light, there was no reason why anyone driving on that road should ever see that sign. Clearly the best spots for signs are at 4 way stops that have a lot of traffic. Whether traffic stops for a stop light or a stop sign does not matter that much, but it does make a difference.

Think about it! At a stop light everyone stops, the traffic backs up, and then everyone goes at the same time. Hopefully they are all moving slowly at this point. But, if you can find a high congestion four-way stop with stop signs, everyone will see the sign. Every person must stop, then go, then stop, then go; until they actually reach the stop sign. They will have sufficient opportunity to read your sign and write down the number. The key to sign location are high congestion areas, where traffic is forced to stop!

Size: Size is important. If your sign is too small to read from a distance, then the person reading the sign may not have time to get the number, which does you no good. One thing you could also do that may help in this situation is to have a website. In my opinion every real estate investor should have a website. Make your website have a catchy title. It is much easier to remember a catchy title than a phone number, unless your phone number actually does spell something catchy. The point is your sign needs to be big enough so that those driving by will take a few steps; first notice your sign, then read your sign, and then actually write down or memorize the phone number or website.

Reach: By reach I mean your signs need to be everywhere. The point is to have people see your sign all over until a mental image gets burned into the brain. When this happens, you have achieved success with your signs. The more points of contact you have with your potential customer, the more efficient your advertising will become. Next time you are out driving take notice of the bandit signs around town. Then when you get home try and recall as many signs as possible. Which signs have stuck is your mind? I guarantee you it will be the signs you saw multiple times.

Content: This is important and encompasses not only what the sign reads, but how it is presented. If you are a foreclosure investor, get signs that say “AVOID FORECLOSURE”. If you are a lease option investor, get signs that say “We Buy Houses- We Take Over Payments”. By selecting the proper content, the sign will work better and you will prescreen your callers by getting signs that meet the criteria of the deals you like to work. This is not to say that the standard “WE BUY HOUSES” signs are bad. If you like to work any type of deal and want lots of calls, this may be a good path for you.

Presentation of the sign involves color and shape. I recently saw signs near my home that were shaped like houses. This caught my attention and similar signs may work for your area. People are starting to become accustomed to signs and not pay attention, but if your sign looks different, it will catch the eyes of more people.

Whether looking different means using different colors or having your signs in the shape of a house; you need to do something to set yourself apart and grab the attention of the people.

Classifieds
The classifieds are another great place to look for leads. There are a few sections in the paper you will want to pay attention to. Namely you want to look in the FSBO section and the For Rent section.

A. FSBO: This section can lead you to good deals by directly contacting the owners. The owners of these houses may not be the best candidates, but if they have been running the same ad for months, they may be willing to take a discount on the home. You can usually go online and view the time length a property has been posted in the classifieds.

By doing this, you can weed out the older listings from the new ones, but this is not to say that a newly posted classified does not have a motivated seller behind it. Newly listed homes could have motivated sellers due to a number of things; divorces, bankruptcy, job relocation, are all potential possibilities. Keep your eyes open for key words such as must sell or needs TLC.  Also in the FSBO section, keep an eye out for numbers that are out of area. If you see this, you have found a winning ticket. If someone lives out of area they could have moved for a number of reasons but the fact is most people do not want to own homes other than the ones they live in currently.

They could have been relocated for a job, gotten a divorce and moved, any number of reasons. If you see a number from an out of town area code, call immediately! Chances are that the person on the other end of the line is a very motivated seller.

B. For Rent: In the For Rent section you will find a lot of disgruntled landlords. Some landlords even have places you might be able to take over with existing positive cash flows, but the landlord is just tired of being a landlord. If you can find a good lead in this section you may be able to get more than one home in a bulk deal. This is a great place to look for leads. Just call the landlord and start talking, more often then not they will speak candidly and you will have a great lead. If you dedicate a few hours one day a week to calling on landlords, I can almost assure you of a deal. This does not take a large commitment of time, and no costs other than a phone line. I encourage you to try this technique for a month and test your results. As time passes and you keep good records, this technique will become something you can use quickly and at very little cost
   

Housing Court = Tired Landlords
This is a great source for motivated sellers. Make some calls and find out where you have to file for an eviction of a tenant (if you do not already know). This is a great place because if someone is being evicted, then they are not paying rent. If the tenant is not paying rent, the landlord still has to pay the monthly mortgage. And finally, if you have a landlord not able to make a monthly mortgage payment, I would say you potentially have a motivated seller. Call these people and start talking to them about their house or building. Say you were driving by, liked the house, and asked the tenant for the number. I don’t know where the conversation will go, but you can easily come up with an excuse to start talking about the property. Right away you should be able to tell if they are a motivated seller. A lot of times you can tell by the tone in their voice. If you do have a potential motivated seller, mention that you are interested in purchasing the property. Be up front with the landlord and you will achieve greater success. This one technique can be great because you may have a landlord on the other end that is tired of being a landlord. If this is the case you might be able to get multiple units with just one simple phone call.

These are just a few of the ways to get good, qualified leads for your real estate investing business. The important thing is that you get leads from multiple sources. If you have only one way of getting good leads and that source stops to produce, you are out of luck. But if you have 20 ways of generating leads and one source stops producing, your business will continue and eventually you will be able to replenish that source or get a new source.

 c.) Drive Qualified leads from your Real Estate Investor Website. My favorite! Create an online digital presence with a customizable, content rich, SEO driven, real estate investor website to elevate your business generate leads from seller and homeowners searching for help and solutions via www.DigitalSEOInc.com. They can help you put together a great website to get sellers and buyers alike along with your social media marketing.

Nowadays potential sellers and homeowners are ALL online. This is the first place they will seek help. They will Google keywords and phrases based on their situation and you can be there to offer them solutions. So get an official Website for your business, create business pages on Facebook, Twitter, Instagram, LinkedIn, Etc. This works and makes you look professional and accountable. I get All My Leads from my online websites and social media.

2. Partner With A Real Estate Investor

Every market has a few dominant investors that do a good amount of business. As a result, they are overwhelmed with door knockings, potential deals, leads, marketing, etc. but they love to work with you for more potential deals and even split your firstdeal or two until you feel comfortable.

Find the investors in your area and call them up. Explain your interest in real estate and see if they'd take on a “bird dog”. A bird dog looks for motivated sellers or undervalued properties or foreclosures, etc., intending to pass the deal on to a real estate investor in exchange for a percentage or fee. The term "bird dog" is a reference to hunting dogs that point to the location of birds and retrieve any birds the hunter successfully shoots. Offer to put out signs out, bring potential deals, etc. whatever it takes to join the team and learn.

In exchange, ask if the real estate investor if he would show you the ropes in real estate investing, just ask if they'd consider it. Most will say yes, provided you hustle and are a benefit to their business.

Once you get your first few deals, you may be able to stay on their team and work with them doing joint deals, or you can strike out on your own. Either way, learn what it takes to be a successful real estate investor and adopt it for yourself.

This is how many current real estate investors got into the game.

By learning the business and ultimately become independently wealthy from real estate investing.

Where do you find real estate investors?

·        REIA Meetings - Network with active investors

·        Real Estate Agents - Call the major agents in your market.

·        Title Attorneys - They know every investor in town, but may not share that information freely. Keep in touch and build rapport.

·        Search Zillow- Look for renovated houses and contact the listing agent.

I searched Zillow and found this renovation. The photo and description tell us this house has been renovated. Contact the agent and see if the house was renovated by a professional investor.

When get a few investor leads, call them up and see if you can take them out for coffee. Offer to do grunt work - believe me, they need the help and would love you for offering.

When you get task, treat it with the utmost urgency, no matter how mundane. If the investor asks you to make photocopies by 5 p.m., do it by 4 p.m. If you are asked to take 20 photos, take 100. Go above and beyond on every task - I promise you it will pay massive dividends.

While you're grinding away, start to add real value to the relationship by finding off market deals. Focus your search using free (or practically free) lists that contain motivated sellers. Examples are:

1.   Tax Delinquent- Cost: Free - Get from your town, city, or county.

2.   Code Violation- Cost: Free - Get from your town, city, or county.

3.   High Equity- Cost: Approx $.05/Lead - Get from Listsource.com

4.   Ugly Houses- Cost: Whatever gas costs - Get by driving your neighborhood.

Start to reach out to these prospects and generate leads. Once you have a hot deal, bring it to your investor and split the profit 50/50. Rinse and repeat until you have enough capital to start house flipping on your own.

This is a great strategy if you're a real estate investing beginner. Learn the ropes without taking too much risk. It's how many started in the business and it will work for you if you're willing to do what it takes.

Conclusion

Real estate investing is a wonderful way to build wealth and is totally accessible to everyone.

Making money in real estate is not easy, particularly if you're starting small. But you're success is 100% predicated on your ability to work hard and take massive action. Having a lot of money helps, but is NOT a prerequisite.

Remember - you can't skip steps in this business and you CAN'T BUY SUCCESS. If you're willing to build sweat equity, stay focused, and never quit, you will smash any goal you have set for yourself. Just pick a path and get to work!

Hope this was helpful!

Best Regards,

Eric