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Mark in St. Louis

Marketing High-End Homes...

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I have a question for everyone out there.

 

But first, here is some background information and my situation.

 

I have two houses under contract with sellers (my first two). One is a CA-LP and the other is a Sandwich-LP.

 

They are both higher-end homes and I have been trying to find tenant-buyers for them for almost 3 weeks now.

 

Both houses need to bring in about $1600 - $1700 per month to cover the seller's payment.

 

I have had a great response from signs, flyers, ads, etc. About 101 calls total between the two houses.

 

The problem is that about 95% of the prospective tenant-buyers can only afford between $800 and $1000 per month. The other 5% have fallen between $1000 and $1200.

 

Now, it has been an eye-opening experience. I can plainly see that I need to focus my marketing efforts for buying homes on the bread-and-butter priced homes and below. I now have a pretty strong tenant-buyer list for those types of homes.

 

But what do I do about the higher priced homes. This seems to be who calls me the most with hard to sell homes. It appears to me that the sign, flyer, ad strategy is primarily pulling in the lower priced tenant-buyers.

 

That tells me I need a different marketing strategy for higher-end homes. But what? I'm new at this so I'm really scratching my head. Anyone have any ideas?

 

It's frustrating that 90%+ of my calls from sellers are higher priced homes and 95% of my tenent-buyer calls are looking for lower priced homes. Theat has created a huge gap that I need help closing.

 

Thanks!

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Mark, your concerns are not unusual. I must tell you that three weeks of marketing a higher end property is not considered out of the ordinary at all. If $900 per month is the median rent in your area, you understand that you are working with a smaller market when doubling that figure. As such, your marketing efforts need to be more focused, and you need to accept these properties will take longer to fill. On top of this is the fact that we are now entering what is historically the slow time of the year in this business. The slowdown typically begins around now, Thanksgiving, and continues through the winter months before picking up again as the Spring approaches.

The first deal, the Cooperative Assignment, is illustrative of one of the reasons why we use this technique. You aren't on the hook in the event you ultimately cannot find a tenant/buyer. You've lost some time, perhaps, and some marketing dollars. But you aren't making the payments yourself.

The other property, the sandwich lease, I recall you taking with the belief that the spread in this deal was sizeable. I'm sure you took this deal with an escape clause in it, and with ample time to market it, too. From a risk standpoint, you're fine.

But, you're not concerned with that. You want some tenant/buyers with money. Well, it seems like your response has been very good to your marketing. The problem is not the number of respondents but, rather, the quality.

You need to target your efforts towards those individuals with the finances to handle these payments. For example, where are the signs and flyers being distributed? Are they in areas that typically attract folks who have the financial resources for those payments? Do you have any upper end apartment complexes in the area that haven't been covered? Office complexes where the tenants are white collar types? Are you running your newpaper ads under Houses for Sale? I have found that this works better with upper end properties, versus Houses for Rent. Have you heavily marketed the specific neighborhood where these properties are located? Many times people drive neighborhoods looking for properties. What about the neighbors? Have you spoken with them? They may know a friend or relative who is looking.

Mark, have a realistic time frame with these more expensive properties, and change who you are marketing to. You need to find where the folks are who can afford $1,500 to $1,800 per month payments, and let them know what you have. You'll be fine. I understand your anxiety. Work harder and smarter at your marketing and you'll find your guy.

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Michael,

 

As usual, thanks for the advice and words of encouragement.

 

I had another idea and wanted to see what you thought of it.

 

I was thinking of getting a list of licensed "buyers agents" in the area. I've heard you can get the list faily cheap, and with email addresses.

 

I was then thinking of sending them an electronic flyer via email. Headline would be: $500 REWARD! For Any Agent That Can Find A Buyer For This Home. Below that would be a photo of them home. Kind of like a post-office "Wanted" poster. The flyer would then go on to describe the lease-option program and the numbers. The theme would be for the buyer's agent to put money in their pocket....even on those buyers that turned out not to be qualified for a loan.

 

What do you think? Is $500 enough of an enticement to get a Realtor's help?

 

I was also thinking of putting together a professional letter to be mailed to the HR department of some of the large companies that are situated around the higher-end homes I have under contract. It would be focused on their relocation/transfer department. The theme would be that we can provide a professional home placement service to transferred managers & executives. Heck, sometimes the companies will even pay for the employee's move. I was thinking that it would be a good way for a transferee to "try out" a home and area. What do you think about this one?

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Guest Guest_puls1234

I would continue to market your home in the same fashion you have been doing because it is truly a numbers game. Eventually you will get the caller who can afford that type of rent. Make sure you put the rent amount in the ad so you don't get people who can only pay $900/mo calling your ad.

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I was also thinking of putting together a professional letter to be mailed to the HR department of some of the large companies that are situated around the higher-end homes I have under contract. It would be focused on their relocation/transfer department. The theme would be that we can provide a professional home placement service to transferred managers & executives. Heck, sometimes the companies will even pay for the employee's move. I was thinking that it would be a good way for a transferee to "try out" a home and area. What do you think about this one?
Very good idea, Mark. In fact, one I've overlooked mentioning that I have used personally.

As for contacting Buyer's Agents, I think this is a good idea, too. Why not? I've said many times successful marketing requires a diverse application of your efforts and creative thinking. These two additional ideas will serve the purpose of further increasing exposure for both the property and for you. Precisely what you are striving for.

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