I speak to investors – both newbie & experienced – on a daily basis. One of the hurdles I’ve heard a lot recently is how it’s so difficult to find investment opportunities. My question to them is, “How are you searching for your deals?” I almost always hear, “I’m on the broker’s mailing list.”
Here’s the problem with that – it’s not predictable. Truth bomb: If you’re relying on someone else to build your business, you’re not in charge of your business.
Here’s what I mean… There are no METRICS. No Key Peformance Indicators (KPIs). No way to quantify that aspect of your business. And without metrics, you can’t MEASURE your business. And if you can’t measure your business, you can’t MANAGE your business.
There are billion ways to find motivated sellers. Google “how to find motivated sellers” and you’ll see. I like to categorize them into two buckets – hunting and fishing.
Fishing is awesome because leads are coming to you. They need you more than you need them. You just drop a line in the water, and the party comes to you. Some frequent fishing techniques are websites, billboards, bandit signs, and bird dog & broker referrals. Fishing techniques are a bit more difficult to quantify though. You can’t rely on leads coming into your website, because you can’t predict how many people will visit each day, unless you’ve been in business a long time and you’re spending money to drive traffic. You can’t rely on referrals coming to you, unless you make it a point to ask X number of people for X number of referrals every week, and then track how many deals come from that over time. It’s doable, but takes a lot of time and a lot of effort.
Hunting is my favorite, because it creates the most predictability and offers the most control of your business from the very beginning. My favorite hunting techniques are 1) direct mail, and 2) outbound calls. It’s just a numbers game. If I mail postcards, I can easily track how many calls come in from it, how many of those convert to purchase agreements, and how many deals actually close. Eventually a ratio will appear. Let’s say I average 1 deal from every 1,500 post cards. If I want to close 1 deal a month, I just need to send 1,500 post cards per month. If I want to close 1 deal a week, I send 1,500 post cards per week. It creates predictability. Now you can forecast revenue, cashflow, growth, and everything else that real business owners should be focused on. It eliminates the stress of ‘when is the next deal coming?’
So don’t rely on anyone else to build your business. Make 100+ phone calls per week and send out 1,000+ postcards per week. Track in a simple spreadsheet how many people you talk to, how many offers you make, how many offers are accepted, how many contracts are executed, and how many deals close. Soon, you’ll have the data you need to put a regular marketing plan in place, and create a consistent stream of deal flow.