Competition is everywhere. Knowing and understanding your competition is crucial. Knowing the benefits they are offering that you are not, what their reputation is compared to yours, and how they are structuring their deals are all things you need to know. By knowing what your competition is doing, it can help you establish an advantage. One of the best things you can do to gain a competitive edge immediately is research your competition. The old saying “keep your friends close and your enemies closer” always rings true in this competitive world of real estate investing. I am constantly on the lookout as to what other investors in my area are doing. If you are new to analyzing your competitors, let me tell you it is pretty easy to do. There are a lot of ways to research your competition. Some of these are:
Go to your local REIA and network
Real Estate Investing Tip #1: Study Your Competition
You need to study your competition in order to understand how you can differentiate your marketing and be more appealing to sellers. You are offering a service that people need. And you need to do it in a way that is more attractive to your customers than your competition. Find out what benefits your competitors are offering and then offer better ones. If your competitors aren’t helping people find apartments to move into, you need to make this one of your specialties. If your competition is doing lease backs, then you need to find a better alternative. It is important to find these positive benefits unique to your business that can be easily stated and remembered. That way, when people hear about the benefits or read about them, they always know it is your company.
One of the best ways to find out about what your competition is doing is to ask the sellers that call you and that you meet with. There is no better way to study your competition than going right to the source. Whenever I have a meeting with a seller I always want to know who I am competing with and what they are offering. Many times I have been sitting at the kitchen table with a seller and asked to see what other letters they have received. You will be surprised because most sellers will willingly give you everything that has been mailed to them. I will then take these letters back to my office and read them and compare and contrast what their marketing pieces to what I am sending out. Most of the time I realize how weak most of my competitors are, but there are a few times I have actually gotten a few good ideas from these letters or conversations with these sellers.
Real Estate Investing Tip #2: Know How Your Competitors Structure Deals
Additionally, you always want to know how your competitors are structuring their deals. I have often used this information against them by strengthening my offer. For example, if another investor makes a higher offer “subject to” the existing mortgage, I will let the seller know the risks of subject to deals. If the seller is making a cash offer then I will generally make a higher offer “subject to.” There is nothing wrong with doing this as long as you don’t bad mouth your competition. Bad mouthing your competition is short sighted thinking, as it may get back to them and can only cause trouble.
You should also try and monitor where your competition is spending their marketing money. Investigate and estimate how much money they are spending especially if they are using other forms of marketing you have not yet tried. It is fairly easy to keep tabs on your competitors and you can always use that information to your advantage.
It is important to remember that your customers have options when it comes to buying and selling. Their options are not just your competitors. For instance, a seller in foreclosure has numerous options they can explore. They can:
Those are only a few of their options. Your goal is to show them and convince them that by working with you it is in their best interest. Your marketing should be convincing enough to get them to at least call you before they explore other options. From there it is up to you to convince them that the other options are not in their best interest.
Real Estate Investing Tip #4: Your Marketing Should Never Stop
Realize that your marketing does not stop at the initial contact. It appears in the way you dress when you show up for the appointment, in the marketing materials you bring to the house, and in the way you present yourself during the meeting. It then carries on to your follow-up marketing if you were not able to put the transaction together in the first meeting. Likewise, after the transaction is complete, your referral network grows and your future marketing is positively affected.
The best way to start preparing your marketing is to make a list of all the options a seller has and then bullet point out some advantages of dealing with you instead of going another route. This way, sellers are compelled to call you because you have shown them you can fix their problem. These will most likely be the biggest benefits you will use in your marketing pieces. These will also be the points you use when handling their objections over the phone or in person.
Real Estate Investing Tip #5: Build Your Foundation
If you avoid some of the pitfalls discussed above and apply the principles mentioned, you should be on your way to building a very strong base for your real estate business. Remember, no business can be structurally sound without a proper foundation built on the quality and frequency of sound marketing.