When I was first getting into this business over eight years ago I was working my way through college and did not have much money. I barely had money to go out with friends, there is no way I was going to spend much on marketing. Stephanie, my wife, and I were working together to buy properties.
We always had multiple mediums going at one time. The top three for little or no out of pocket expense are; calling for cash, driving for dollars, and bandit signs.
Calling for Cash
The biggest thing to understand here is that you will be calling people looking for motivation. You ARE NOT trying to buy a house over the phone.
The two people I would call are For Sale By Owners (FSBO) and For Rent By Owner (FRBO). The easiest way to do this is to use the newspaper. You will also have better results with fewer calls if you age your ads. What I mean by that is you will wait three or four weeks before you make your calls. This works because if the house is still for sale or for rent after a period of time there is a better chance the owner is motivated.
These days you won’t find very many leads from the newspaper because internet and online classifieds, have really taken over. I still think the newspaper is a great place to start because it is easier to find phone numbers fast. You can use the same strategy with aging online classifieds. What you may want to consider is hiring someone to go through these for you and put them in a spreadsheet. You can hire this type of employees virtually at odesk.com.
Driving for Dollars
This is not free because you will be driving but it is a good way to find deals with a small budget. Driving for dollars simply means you drive around certain areas looking for deals. You will want to focus on a few neighborhoods so you are not all over the place. Here is what you are looking for:
- Overgrown yards or trashed houses
- Lots of newspapers or other signs of a vacant home
- Moving trucks
When you see a vacant home I would write down the address and go put a flyer on the door. When you get back to your office take all the addresses that you wrote down and try to find the owner so you can contact them directly. I would start with county records. You can also try mailing a letter to the property with a note on the front of the envelope that says “Please do not forward. Forwarding address requested” When the postman sees this they will put one of those yellow stickers on the letter with the previous residents forwarding address and return it to you. This is of course,if there is a forwarding address. You can also talk to a few of the neighbors while you are in the area. You have a good chance at a great deal if the property is vacant and there is no effort to sell it or rent it.
FSBOs can be great. At least you know they want to sell and you know they are not working with an agent. It is great when you see a FSBO open house because you can go talk to them directly. When you see a FSBO, write down the address and the phone number. I would then go and knock on the door, if no one is there leave a flyer. When you get back to your office you can either call, (which is what I recommend) or you can start a series of direct letter mailers to the address.
FRBOs are great too. Everything I mentioned above applies here. The only difference is if you knock on the door you may get a tenant instead of the owner. Also with FRBOs you will want to find the direct mailing address of the owner if you choose to send some letters. The way you find the owners address is either use anywho.com and do a reverse lookup with their phone number or look on county records.
This one will cost you some money. If you can afford it, I strongly recommend getting professional signs made. Steph and I used to buy poster board and make signs. That won’t work as well but it does work and you will get calls. The idea here is to get your message to as many people as you can with the lowest cost. You will be looking at anything from $.25 to $3.00 per sign and chances are good hundreds of people will see it. That is a pretty big bang for the buck. You will really want these in the high traffic areas like off ramps from interstates or highways, busy intersections, around elementary schools, and coming out of busy shopping centers. Putting them up with stakes in the ground works the best but putting them on poles as high as you can works too. These signs get taken down and torn up often so you need to be consistent at putting them up or it won’t work.
These are called Bandit Signs because city officials don’t really like them (even though politicians use them more than anyone) and they are considered littering. There is always the risk of getting fines and nasty calls from the city. We stopped using them partly because of the pain and the amount of work it takes to make it work and partly because the cities don’t like it. It is your choice if you want to use these. I just want to share with you that they are cheap and they work.