Some New Tactics!

May 8, 2012 · 12 comments

Over the past couple months, I’ve been finding it harder and harder to come across deals that are good enough to meet my standards for rehabbing/flipping. Apparently, I’m not alone. I’ve talked to lots of other investors across the country, and it appears that in many (most?) major markets, competition has increased tremendously, owner occupants are revving up their buying and new investors are jumping into the fray.

Unfortunately, while prices are increasing on the buying side, they’re not keeping pace on the selling side — resale values are still often limited by appraisal values, which aren’t increasing very much, if at all…at least not in my market.

That said, we’re “expanding our horizons” a bit, and are going to be trying a couple new tactics to find deals (along with continuing what we’ve been doing):

  1. We’re going to be starting a decent sized direct marketing campaign, sending letters and postcards to “qualified” landlords and owner occupants who may be good candidates to sell their properties; and
  2. We’re starting to visit other markets outside our current area (both within the state and in other states) and are starting to try to find deals in these other markets.

I imagine I will have a lot to write about if either of these tactics starts to show results. In fact, I’ll try to document both of these things as I make progress. Stay tuned!

12 responses to “Some New Tactics!”

  1. Ingrid says:

    J Scott, if you happen to make your way to the Upstate of SC for investing, (not too far from the ATL area), please email me….I would be interesting in doing some “job shadowing”, if you will….:)

  2. Jingle says:

    You might want to consider purchasing at the Public Trustee or Judicial Sales (however it is set up in GA). It’s risk is heightened 5X, but the returns are good. If you get creative you can really knock the risks of the unknown down. The biggest problem I end up having is tenants occupying units and the federal laws that I have to comply with. Buying blind will grow new hair on your chest!


  3. J Scott says:

    Hey Jingle,

    Trustee Sales are my next focus, after the direct marketing. There’s a decent sized learning curve on the direct marketing (setting up the lead capture, negotiating, etc), so I’ll be focused on that for the next month or two, but after that, I’ll be learning everything I can about trustee sales and then giving that avenue a shot as well.

  4. J Scott says:

    Hi Ingrid,

    No plans to visit SC as of now, but if that changes, I’ll let you know!

  5. Kristine-CA says:

    I had a feeling that you wouldn’t be able to avoid direct marketing, or you’d at least have to least try it. I think it’s going to work well for you and Carol. I wish my learning curve had been a month or two. 🙂 Looking forward to hearing more about what you learn!

  6. Dan says:

    Nice read… Along with the trend of new tactics (this isn’t completely new, but new to some), how would you say investors generally feel about flat fee MLS as a marketing strategy. It seems to me that market savvy investors would be some of the best candidates for a successful MLS listing strategy.

    Looking forward to reading more and would welcome further communication.


  7. Great minds think alike 🙂 I say that because I have been doing the same. Took a research trip to the courthouse auction at the beginning of the month for this same reason. There was quite a bit of action going on. Some houses opened up at good discounts other (most) were a joke. I have already scouted a couple of houses that will be in the auction next month so I am going to give those a try. You should look at buying at the auction and see what kind of deals you find.

    I have also been researching the direct mail approach. I would be curious to see if we end up looking at the same things.

    However, right now it seems like I finally found the next rehab subject so I will be working on that in the meantime.

  8. J Scott says:

    Hey Dan,

    I personally think flat-fee listing services are a terrible idea for investors. Here are my reasons:

    1. They generally don’t save much money. Most flat fee listing services will upsell things like signs, realtor lockboxes, photos, etc — by the time you have everything you need for your listing/marketing, you’ve pay as much, if not more, than you would with a full-service listing agent;

    2. Great listing agents get properties sold based on their network — they know the agents who have buyers and they can market directly to those agents. We often get offers on our properties before they’re listed because my wife will market to other agents who we know have clients who are ready to buy in our area;

    3. Many buyer’s agents don’t like the hassle of dealing with flat fee listings, and will steer their clients away from flat fee listings. As a seller, a reduced buyer-pool is the worst thing that can happen;

    4. Most flat fee listing agents don’t work very hard after the listing is paid for, so you can’t expect much support with negotiation, paperwork, closing, etc (unless you pay extra for it).

  9. Dan says:

    Hi J,
    I appreciate your answer. If I may respond to a few points you brought up…

    1. If you really lay out each individual expense I think you will find that even with (optional) upsells, the numbers aren’t even close. My listings are $169. Lockbox, $20, sign $10 at a hardware store, photos free… compare that to 5% of say a $200,000 property and you’ve still saved over $9,000.

    2. The MLS markets directly to ALL agents with a matching buyer criteria, and to the buyers themselves if they’ve elected to receive communication. This is just as, if not more effective because it targets specifically interested buyers and is not limited to one specific agent’s network (who will receive the communication anyway).

    3. On average my listings reach about 350 active property searches. The listings do not outwardly appear any different – it is a small change of wording at the bottom that indicates an entry only listing. Since buyers will receive the communication, the agent doesn’t have the opportunity to steer them away if they are interested!

    4. If you put a price on an agent’s time, you are paying hundreds per hour for the support you mention – most of which either amounts to administrative tasks or is handled by a lawyer regardless (closing, paperwork).

    I understand your wife is an agent but really, these arguments don’t hold up when you truly lay out the services provided and do the math.

    Thanks again for your opinion, but I think you may find that taking that extra step away from conventional wisdom will truly pay off. Best of luck to you and I look forward to continuing to read…


  10. J Scott says:

    Hi Dan,

    First, my wife (and myself) being agents plays absolutely no role in my opinion. We rarely list houses for sellers other than ourselves, so I have no vested interest in whether sellers use flat fee services or not (other than wanting to provide the best information). In fact, I’d prefer my competition use flat fee services…it will make my houses that much easier to sell.

    Ultimately, I can only give my experiences with flat fee listing services — it’s quite possible that others are having different experiences or use the services differently. That said, here is my perspective on each of your points (again, just my perspective):

    1. One of the largest flat fee listing brokers in the country is here in Atlanta. Having spoken with a couple of the senior brokers there, the claim is often made that many flat fee listers will provide a la carte services that often incur fees greater than 3% of the sales prices, which would be the standard full-service commission around here. I can’t speak for specific flat fee listing services, but at least some use marketing and sales techniques to extract more money for less service — this is bad for Sellers.

    2. I definitely DISAGREE with you this one. Most of our sales come through direct networking of our properties to agents we know. These agents know the the quality of our rehabs, know how easy we are to work with, know that we’ll always do the right thing for them and their buyers and know that we’ll ensure the closing process is quick and efficient. For that reason, agents want to work with us, and when they talk to their buyers about us, the buyers want to work with us and buy our houses. So, if you’re selling a house that competes with mine, I can promise you that your MLS marketing iS NOT as efficient as our marketing. And I’d venture to say that in any market, there will be those listing agents who are getting more than their fair share of the buyers because they are doing a LOT more than just sticking the property on the MLS and waiting for the listing to be seen. If you want to sell your house fast, one of the keys is to find a great listing agent…

    3. Again, definitely disagree. If you’re a small brokerage and selling agents don’t know who you are, that might be the case. But, once you get big enough that every selling agent knows your name and knows that you do a lot of flat fee listings, they will start to check the listings and they will avoid those that are flat fee. It makes perfect sense, too. It’s still a buyer’s market out there, and when it’s just as easy for a selling agent to lead their clients to a listing that will be a quick and easy sell (mine, for instance :)), why would they want to take their clients to those listings where everything will likely require more work on the selling agent’s part? While unethical, I have selling agents tell me all the time that they steer their clients away from flat fee listings.

    4. In my experience, the flat fee broker does very little of the administrative tasks, so it falls to the seller or the selling agent. The seller probably isn’t qualified to do it, and the selling agent realizes that most of the work will fall to them — which is why many of them steer their clients away from these listings. Goes back to my point above.

    Again, my wife and I aren’t listing agents for other sellers — we’re not trying to convince people to hire us, and I have no motivation for saying these things if I didn’t know them to be true. My perspective is based on discussions with both flat fee brokers (who tell me things they probably shouldn’t) and selling agents (who also tell me things they probably shouldn’t). But, the things they tell me are important, which is why I am happy to pass them on…

  11. Lena says:

    Hi J,
    We have a lot of houses for you to buy. Will you send me your contact info so I can put you on our buyers list?

  12. J Scott says:


    Feel free to send what you have to

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