I'm doing a "mini blog series" on the importance of creating a list of people – especially a list of buyers – who you can work with to make your real estate investing deals happen.
In previous blog posts I talked about the importance of the list, just how valuable the list is to my business, and I started to talk about how to build that list. In the future, I'll go into more detail about how to build your list but there's something I want to talk about first – segmenting your list.
If you want to multiply your success, you need to divide your list. In other words, you're not just creating a single big list of people. Instead, you should create smaller lists based on what each contact wants to do.
You need three lists in total
To be successful, you need to build 3 lists and cultivate relationships with the people in each of those lists. We’ve all heard "the money is in the list!" and this is true but the real secret is that the money is in the right relationships with the right lists!
Here are the lists you need to create:
- Motivated Sellers
- Motivated Rent-to-own buyers
- Motivated Investors (who I've been called "buyers" in some of my blog posts)
Next, I'm going to go over each of these lists.
Building a list of Motivated sellers
These are the people who really need to sell their home. We sometimes call them "distressed" homeowners. They could be motivated because of financial reasons (perhaps their home is in or near foreclosure) or they could be motivated for personal reasons (perhaps they are going through a divorce or they got a job somewhere else and have to move away).
The only "problem" with this list (if you want to call it a problem) is that motivated sellers have one issue they'd like solved (the sale of their home) so they tend to stay on your list for a very short time – usually until their problem is solved (either you wholesale the property or you buy it). On average, expect them to remain on your list for 120 days or so.
Of the three lists, this list is the easiest to create because there are always lots of motivated sellers (you just have to know where to look and market). In future blog posts, I'll reveal some great ways that you can find deals and add motivated sellers to your list, but if you're looking for some quick hints right now, I'd suggest that bandit signs and voice broadcasts work really well.
Building a list of Motivated Rent-to-Own Buyers
This is a great list to build because these are people who are interested in owning a home but are unable to own a home (for a number of reasons, often because of poor credit). I help them get into a home at an affordable month-by-month payment that allows them to get a home when they thought the door had been closed to them.
This is a huge market and there is a lot of money to be made from helping the rent-to-own buyers to work with you. For that reason, I love to build this list. I figure, you can never have too many people who want a rent-to-own home. However, like the motivated seller list above, they tend to be active on the list for a short time (about 120 days or so) and as soon as you solve their problem, they fade away.
Both of these lists, then, are short term lists that are filled with people who have one problem that you can solve quickly. It requires a lot of activity on your part (or your team's part) to constantly fill these lists (but don't worry, it's activity that you can still do even when surfing off the coast of Australia or walking along the Great Wall of China, which is where I'm headed soon!).
Building a list of Motivated Investors
The above two lists are important but this one is truly the money list. It's the list I worked hard to build before I became The DM, and it's the list that set me apart from other real estate investors early in my "career" to skyrocket me to DM status, and it's the list that has continued to keep me earning money while I travel the world.
This list is a list of investors who want to make money by buying (wholesale) real estate properties from me. Unlike the first two lists, this list is made up of people who will keep coming back again and again because they know I deliver results. (In fact, I have several people on my list who have been with me for years). These investors know that I'm very active and am always on the lookout for amazing deals.
This is the list I would run into a burning building for! This is the list that, if I had to start over, would get be back to DM status almost immediately without breaking a sweat.
Oh, and here's something else I love about this list: The more successful you help this list become, the more responsive they become. Think of it this way: If I help someone make money on one property and I help someone make money on ten properties, there's a good chance that the 10X investor will bend over backwards to get money when I bring another great deal to them.
Two list-building secrets that can make or break your success
Secret #1: Although I focus on all three lists, I spend most of my time and list-building investment on this list. My thinking is: I can always find deals and I can always find rent-to-own buyers... but I can never have enough investors.
Secret #2: When you build your list, segment them into the three lists (instead of just one big list) and make sure the relationship you build with each one of them is appropriate for the needs and timeline of the people on that list.
I can't stress this last point enough. All prospects have different needs and wants. In general, you can make some assumptions about those needs and wants depending on the type of list they go into. Obviously, it wouldn't make sense to talk to sellers in the same way you talk to investors. That's a waste of your time, money, and effort and it will almost certainly result in real estate investing failure.
Instead, segment your lists and then speak to each of your lists in a way that addresses their specific needs and wants and concerns and motivators and goals. You'll notice a HUGE difference in response when you do that.
As I've already mentioned, I use email to help me stay in contact with each of my lists. Stay tuned to my blog to find out what I say in my emails to keep my list excited about working with me.
Signing off from the list-building headquarters
Your list-building friend and mentor
Mark Evans, DM, DN