Build a Database and Work It

The engine that drives all successful long-term lead generation programs is a contact database. The contacts in it are the fuel. Your job as the investor is to fuel the engine (put contacts in the database) and drive your lead generation program forward. The interesting thing is that the quality of your results is more a matter of the quality of your fuel (contacts) than a product of your driving skill (prospecting and marketing ability). What goes in has a direct effect on what comes out.

The chart below, "The Lead Generation Database Model," explains how you can use your database to generate leads. Your database will be built from two groups—people you Haven't Met and people you have Met. If you haven't met them, they are targeted sellers who live in a geographic area in which you'd like to own property or are a particular type of seller who may need to sell (FSBOs, expireds, absentees, landlords, builders, etc). You will record their contact information in your database and then categorize them for easy reference (e.g., "Local Absentee Owner Mailing List" or "Multiple Property Owner Mailing List"). Once they are in the database, you can contact them (prospect and market) with appropriate messages to encourage them to consider calling you when they are ready to sell.

If you have met these individuals, you record them in your database and categorize them in your Work Network, your Leads Network, or both. Then, as with your Haven't Met group, you will prospect and mar-

ket to them with appropriate messages to encourage them to consider contacting you if they know of a property or a seller who might constitute an investment opportunity.

The Met half of your contact database will include two basic kinds of contacts: all the people who help and advise you on investing (your Work Network) and all the people who might or will send you leads (your Leads Network). The Network Model is designed to help you build the first. The Lead Generation Model is designed to help you build the second. Over time the two should become deeply intertwined.

As the chart below, "Merging Your Work Network with Your Leads Network," shows, your goal as an investor is to achieve as much concentricity as possible between your Work Network and your Leads Network. When you stop to think about it, this makes perfect sense. Who is better qualified to send you real estate investment opportunities that match your Criteria than the people who work with you on those invest-

MergingYour Work Network With Your Leads Network

MergingYour Work Network With Your Leads Network

ments? The real estate agent you may have used to find your home or your first rental property will have a strong sense of your Criteria and can be on the lookout for properties that match them. The contractor you employed to repair that property may know another owner who would rather sell than make similar repairs. As a general rule, the people in your Work Network will be well positioned to send you leads. After all, they're in the real estate investment business too.

The individuals in your Work Network increasingly should make up the heart of your contact database, but along the way you'll add other names as well. Your family, friends, neighbors, and coworkers can send you leads if you include them consistently in your prospecting and marketing activities. You just have to educate them about your Criteria. In the end everyone you meet should know you're an investor (you'll tell them) and be added to this database. Once you have a target area, you can purchase mailing lists so that you can contact large numbers of people by e-mail with a click of a mouse or by mail using printed mailing labels. Your database powers these efforts and keeps you organized.

Your database doesn't have to be an expensive software package. The vast majority of our Millionaire Real Estate Investors used Microsoft Outlook as their primary database. They used this simple, ubiquitous program to its fullest extent,

"In 1982, I saved up $4,000 and bought my first investment property. It was all the money I had in the world, and I spent it on a shack on 19 acres. I bought it for $24,000 — I put my $4,000 down, and the owner financed the rest. My payment was $170 a month and I rented it for $100, so I had negative cash flow, which is not what most investors would call a great investment. But, three years later I sold it for $45,000. In the meantime I had spent $3,000 because of the negative cash flow, but I still netted $17,000. In other words, I quadrupled my $4,000 investment."

Mike Tavener Millionaire Real Estate Investor

Asheville, NC

adding detailed notes to their contacts and creating categories (both are basic functions of the program) to keep records of previous interactions and prioritize their contacts. Just under 10 percent of the investors we surveyed used more than one database. In almost every case they used Outlook to build their databases and later, as their investing grew, incorporated one of the powerful specialized contact management programs to help them track their prospecting and marketing efforts. The graph in the chart below details the databases our investors used.

Millionaire Real Estate Investor Preferred Databases

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