How To Speed Up The REI Deal Cycle

Speed Up Real Estate Investing Deals

A nationwide trend we have been noticing is that motivated sellers are not responding to some of the direct mail that has worked reliably in the past. Maybe they are going to websites, but they are not filling out and submitting lead forms. This is a big problem because, as home buyers, we must buy homes. We are putting time, effort, and money into our marketing so we can close our desired number of deals at (or above!) our desired price point.

It is imperative to know your numbers and to understand the cash conversion cycle, from when you put the money out until you get paid from the deal. Ideally, this turnaround will be as short as possible. What can we, as buyers, do to speed up our cash conversion cycle? Educate motivated sellers, but we need to focus less on educating about what we do as professionals and more on what they, the sellers, want.

Why should we have to educate homeowners? If we do not solve this problem, then we will not have any deals to buy. This puts pressure on payrolls, staffing, and innovations we want to add to the business. To avoid getting stuck in this profitless loop, we can shift the conversation from being about the solution we provide to focusing on the challenges and desires of the motivated seller.

For instance, let us consider homes in forbearance. Times are hard and there are many people who are not able to pay their mortgages. What is it that these homeowners are worried about? Foreclosure or pre-foreclosure. To earn their trust and their business we must lead with value and join the conversation they are already having with themselves, their family, and their friends. Our direct mail to these sellers might focus on “The Top 5 Ways To Keep Your Home And Avoid Foreclosure.” This will be much more relevant to their situation and stand out from the piles of “Cash Buyer” postcards they are already putting into the trash without considering.

Maybe you work in an area with many distressed homes or have a list for properties in physical distress. We know that no one wants to live in a house that is in disrepair, but instead of marketing that sends the message, “I can see that your house is falling apart, sell me your house,” we can send an education piece — a video or checklist — that explains “The Top 5 Ways To Improve Your Home On A Budget.” All these educational marketing pieces can have your normal call to action, your normal benefit statement. Just be sure to include a transitional call to action — a little giveaway at the bottom. It can be a QR code that takes them to a video, for example. This transitional call to action can be any value you provide at no cost and with little commitment from the homeowner.

Why should we make this effort? When we offer some additional value and education, suddenly people who were paralyzed by fear start feeling empowered. What causes inaction? Fear. What causes fear? The unknown. Using marketing that breaks this inertia can shorten the cash conversion cycle, leading to more money in our accounts.

When brainstorming possible value adds and transitional calls to action, ask yourself what is keeping the motivated sellers in your market from acting. What is it that they are afraid of? What can I do to eliminate those fears? Educate homeowners on their options and they will feel so much calmer, prepared, and motivated. And who will they associating these positive emotions with? You! You will be the one who taught them how to solve their problem. You will have genuinely helped them and elevated yourself above just another salesperson.

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