Melvin Feller MA Examines the Best Real Estate Investing Deal Strategies

Melvin Feller MA Examines the Best Real Estate Investing Deal Strategies

Melvin Feller is known as “The Entrepreneur’s Mentor” because Melvin walks his talk. Melvin Feller has been there and done that and more importantly, Melvin Feller knows how to transfer the skillset for success. This is main reason that he has been the sought after coach to hundreds of small business owners, entrepreneurs, Realtors, Real estate investors and service professional internationally. Melvin Feller’s main talent is to show you how the step by step process to build and enjoy a successful 6-figure plus business while having a balanced life. Melvin Feller is currently pursuing another graduate degree as an MBA.

Because deal finding IS so crucial to one’s investing success, I recently decided to look back and see which methods have generated the most deals and the best deals for me. In reviewing the 150 properties I have bought or flipped over the last 5 years, I was surprised to find that many of the “traditional” sources of great deals have not worked for me, while some less obvious methods have been great lead generators. I would like to share with you the results of my little inventory.

Good: The Multiple Listing Service. The MLS is essentially a catalog of all the properties listed for sale by brokers. Some of them are good deals for investors, and some are not. The trick is to ferret out which properties have motivated sellers without making offers on all of them. I have honed this skill through years of translating agent lingo like, “Handyman’s special” (looks bad, smells bad, has at least one major system that does not function), “needs TLC” (ugly, but not smelly, and everything works).

Why it works: Properties listed in the MLS are for sale. This may seem like an obvious statement, but some of the other methods touted as great ways to find deals involve locating owners, then finding out if they want to sell. Properties in the MLS also have the advantage that all of the information about the property is pretty much laid out for you — a major time saver. In addition, with the sophisticated, computerized access available to your agent, it is a matter of a few keystrokes to view all of the properties that are handyman’s specials, or bank-owned, or in estate, or priced under a certain dollar figure — whatever you’d like to concentrate on.

Another reasons that the MLS has worked so well for me is that I am generally in the market for ugly properties. Coincidentally, these are the same properties that most agents prefer not to spend a lot of time with. In many cases, they are downright cooperative — particularly when I’m offering all cash and a quick closing.

Bad: Direct mail to real estate agents. Last year, I had the brilliant idea that I might be able to find MLS-listed properties even faster if I simply let agents know what I was looking for. Therefore, I purchased 1,200 agent names from the Board of Realtors and generated a 3-part mailing send to every agent in town.

The theme of this campaign was this: if you, Ms. Agent, have a property listed that fits my criteria, I’ll make an offer and you get to keep the entire commission. Out rolled my brilliant campaign -all mailed first class, incidentally — and in came the phone calls. All seven of them. That is right. The week after the first letters went out, I received seven calls. We had already made offers on three of the properties; two were out of our price range; and two were overpriced listings about to expire.

The next mailing generated even more results — about 15 calls — all in the same categories. The final mailing, a postcard, received no notice at all. I wasted about $1400 on a campaign that generated absolutely nothing.

What went wrong: I still think that this idea has some merit, but if I do it again, I will make some major changes. First, I will target only the 200 or so agents who list the types of properties I buy. Second, I will do a better job of writing the letters, emphasizing how the agent and his seller would benefit from working with me. Third, I will make my campaign a continuous one throughout the year, testing different letters for response and mailing the best to the same agents repeatedly. Lastly, I will personalize the campaign by following up with a phone call to the 50 or so best prospects. Oh well, live and learn.

Good: Ads in the Yellow Pages. For 18 years, I have had an ad in the “real estate” section of the Yellow Pages. Each year, the ad has had some variation of the wording, “I buy houses — all cash”. This ad only generates 3–4 calls a month, but for some reason the quality of the calls is better than those that are generated by any other method I have ever used. The sellers tend to be motivated, cooperative, and have unlisted properties.

Why it is worked for me: I love that you deal with these ads once a year, and then forget them. While they are pricey — up to $3500 per year — the phone company will generally bill you monthly for the cost. In addition, as one of the very few ads in the phonebook that promise to buy houses, I do not have much competition.

Bad: Advertised FSBOs. Properties for Sale By Owner, a.k.a. FSBOs, are a favorite for some real estate investors. I, on the other hand, have never purchased a property from an owner who advertised his property for sale rather than calling me.

I have found several problems with trying to buy FSBOs. The first is that some are not actually for sale. Some FSBOs are just “testing the market to see what kind of offer’s he’ll get. Other FSBO sellers are very motivated to sell, but do not list because they want to keep all of the money from the sale. They do not want to pay a commission — but they do not want to take a lower price, either. In addition, sometimes a seller chooses to try to sell their property by themselves because they owe too much to pay a 5%-7% commission, even if he sells it at full price.

If you are buying expensive homes creatively, these sellers are ripe for the kind of solution you offer. My strategy is to buy ugly houses cheaply and for cash, and I just do not find this type of deal in advertised FSBOs.

Good: Flyers to Targeted Neighborhoods. Last year, I had 10,000 double-sided “I buy houses” flyers printed. I hired someone to put this flyer in the door of every one, two, or three family property they saw in my “farm”. Every 3 weeks, 3,000 of these flyers were delivered, and the response from qualified sellers was excellent. For a cost of less than $500, I made two deals that netted over $6,000.

Bad: Billboards in the same neighborhood. Here is a lesson in messing up a good thing: hot on the heels of my massively successful flyer campaign, I decided to spring for four large billboards in the same neighborhood. The problem was that my marketing budget is only so big, and buying the billboards meant stopping the flyers. Still, I figured that the billboards would get more attention anyway, so I forked over the $1,800 and got…

Absolutely nothing. Not one single phone call. Not even from an unqualified seller. Not even a wrong number. Nothing.

The Moral? Stick with What works.

Good: Flapping my gums. Luckily, talking — a lot — is something I have little problem with. Laugh if you will, but my willingness to talk about what I do to anyone who will listen — or even pretend to listen — has made me a lot of money.

For instance, when my new barber asked me what I did for a living, I responded that I buy and sell houses. His immediate reaction was, “really? How pretty do they have to be?” Long story short: I bought his unwanted Junker house for $4,000 and sold it for $7,000 the same day. When my attorney wanted to know what type of assets I wanted to protect, I told him about my house-buying business. Four months later, he referred a client to me who sold me a $35,000 property for $12,000. You get the picture.

Bad: Using only one lead generator at a time. In my experience, it is best to use at least three different ways of finding deals at the same time: preferably two you have used before with some success, plus one that you are testing. Which brings us to

Ugly: Not knowing which of your deal-finding strategies are working, and which are not! If you are going to spend money on flyers or ads or telephone pole signs or whatever, it is very important that you pay attention to which methods are generating good leads, and which are duds. In looking over my own deals was very surprised to discover how many great deals came from attorney referrals — a strategy that I have not pursued aggressively, but will in the future. If you are not tracking your lead generators to discover which are working and which you should give up, you are wasting time and money that could be put to use making you deals.

Melvin Feller MA Texas and Oklahoma. Melvin Feller founded Melvin Feller Business Group and Melvin Feller Ministries in the 1970s to help individuals and organizations achieve their specific Victory. Victory as defined by the individual or organization are achieving strategic objectives, exceeding goals, getting results or desired outcomes and a positive outreach with grace and as a ministries. He has extensive experience assisting businesses achieve top and bottom line results. He has broad practical experience creating WINNERS in many organizations and industries. He has hands-on experience in executive leadership, operations, logistics, sales, program management, organizational development, training, and customer service. He has coached teams to achieve results in strategic planning, business development, organizational design, sales, and customer response and business process improvement. He has prepared and presented many workshops nationally and internationally.

President of Melvin Feller Business Group With over three decades of executive coaching, speaking, and most importantly, real-life, in-the-trenches experience.