Ways to Attract Investors As Clients

Written by Posted On Thursday, 05 October 2006 17:00

If you've been following this series of articles about attracting investors as clients, you've read about the benefits of working with investors. You've also learned the differences between real estate investors and your average client. The next step is designing a marketing plan that targets investors and brings them into your business.

Real estate investors are an underserved niche for a reason; they're rather difficult to target. Unlike conventional buyers and sellers, you can't buy a full-page insert in the newspaper and expect them to come flowing in. You have to use multiple marketing strategies, each of them specifically targeting investors. Here are five strategies to get you started:

  1. Go to Real Estate Investor Associations

The most effective way to reach investors is through Real Estate Investor Associations. REIAs are regularly held meetings where investors congregate to learn more about investing and network with each other. Large cities usually have several hundred members, and most small towns usually have at least a two or three dozen in attendance. You can find a list of them on the National REIA website .

If they don't list a REIA in your area, check your local newspapers or business journals for meeting announcements. You can also call the closest REIA and ask them if they have a subgroup in your area. While you're on the phone with them, ask where they have other meetings. You may want to attend several, even if they are away from your normal territory.

Once you find a REIA, consider signing up for a vendor membership. Vendors typically have a few minutes to advertise at the beginning of every meeting and can reserve a space at the back of the room. If you use the time and space correctly, you can potentially attract several dozen investors in one meeting. It's a powerful strategy.

  1. Partner with Other Professionals

At the Real Estate Investor Association, you'll also meet other vendors that work with investors, such as:

  • Mortgage brokers

  • Attorneys

  • Accountants

  • Handymen

  • Hard money lenders

If they've been around for awhile, investors probably know them and trust them. By partnering with them, you can not only access their network of clients, but you'll also boost your credibility by associating with them.

Some partnerships are as simple as handing out each other's business cards, but I recommend promoting each other in as many ways as possible. Consider:

  • Forming an advisory council, where investors can come to your group for anything they need

  • Cross-linking to each other's websites

  • Cross promoting on each other's newsletters

  • Holding free seminars, where you educate investors on topics relating to your expertise

  • Splitting the cost on larger advertisements or events

  1. Call Bandit Signs

The first question most people ask here is, "What's a bandit sign?" It's a name for signs that investors plaster on telephone poles, at busy intersections, and around fast food restaurants. They usually say something like:

  • Cash for Houses

  • Stop Foreclosure

  • Can Close Fast

  • Get Out Now

The reason investors put up those signs is because they're looking for good deals. So, they're a prime candidate for your buyer agency services. Simply call and ask if they like you to send them opportunities. Most will say yes.

Then, when you find a good investment, call them and give some basic information. If they're interested in buying it, sign a buyer agency agreement exclusive to the property and show it to them.

Eventually, you'll build up a huge database of people that are desperate for good investments, allowing you to close dozens of houses per year.

  1. Call "For Rent" Signs

We're conditioned to see "For Rent" signs as an advertisement for a rental property, but when you're hunting investors, they mean so much more. They're a big red flag that a landlord owns the property. So, stop and write down the number.

Because of their cash flow, landlords can get financed for huge amounts of real estate. They also need less equity than your typical flipper or rehabber, making it easier to find investments for them. You might also be able to serve as their property manager, bringing you extra cash flow.

Call and ask if they would be interested in any new investments, if you can bring them an opportunity with positive cash flow. Once again, most will say yes. When you find a good investment, show them some of the primary details and then sign a buyer agency agreement exclusive to the property.

Sometimes, you'll call and get a property manager, not the landlord. It's a tricky situation. Usually, the best policy is to tell them that you might have some other properties the landlord would be interested in, and ask them to put you in contact. You might even ask if the property manager would be interested in some more work from your own clients. It helps get them on your side and might open a partnership opportunity.

  1. Advertise in the Classifieds

All of these strategies above are free (except a vendor membership), but if they're not enough, you might consider investing some money in classified advertising. Many investors search the real estate classifieds on a daily or weekly basis for potential deals. Your major city newspaper should even have an "Investment Property" section, which should draw plenty of targeted attention.

Usually, the classified ads are moderately expensive in the major city newspapers though. Unless you're desperate for lots of new clients, you should test your advertisements in the smaller newspapers first. Many investors read them too, so you might pick up the same clients for a fraction of the price.

Once you've tested the ads, I recommend buying a long-term commitment with the newspaper. Classified advertising is not a one day per week strategy. People might have to see your advertisement in the paper for weeks before calling. You need to give it some time to start working for you.

If you write a good ad, you can expect to pick up one or two investors per month. It's nothing exciting, but when each investor has the potential to make you $100,000 per year, the return on investment for your advertising dollars is more than fair.

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