Below Market Value - Part II

October 06

• This article is available as an MP3 audio -
• click here to listen or right-click to download
• The newsletter is available as a Podcast
• - subscribe to http://www.yourpropertyexpert.com/rss-articles.php

This is part 2 of the guide to Below Market Value.

In part 1, I explained why I believe that BMV does exist, and then went on to look at leaflets, combined with testing (checking which versions work and which do not.)

In this part, I am going to talk about newspaper adverts, and personal contacts.

Newspaper adverts are deeply misunderstood - there is a perception that they are generally wasted, and this is true, up to a point.

The issue, however, is not whether 999 out of 1,000 readers ignore your advert - the issue is whether ENOUGH readers pay attention, and go on to do business with you, that you make enough money to cover the costs of the ongoing advertising.

And the word ONGOING was lurking there in that last sentence, to trip the unwary. I have used paper advertising in many of my businesses, not just property investment, and I have learnt a couple of things.

1: The direct mail approach is a far more cost-effective way to determine which adverts work, and which fail. Only once you know you have an advert that gets responses is it time to start rolling that advert out to a wider audience through newspapers.

So I would only recommend that you consider newspaper advertising after your first succesful leafleting campaign has generated an advert that works.

2: Advertising rates vary wildly, and are open to negotiation.

This second point is well worth noting. You will be quoted a rate, and often deal with someone who makes out that they have no authority to vary that rate.

There are some nice tricks - firstly, find out when the deadline for adverts is, and phone up about an hour before - asking if they have any last-minute-space that they are prepared to give on a deep discount to fill.

Another trick, if you are not worried about WHEN your advert comes out, is to send in a copy of the advert, a cheque for about a third of the normal price, and a covering letter saying that, if they have any space come up in the next three months, then run the advert and cash the cheque - if they do not have any space, then return the cheque please. The worst thing that can happen is that you get the cheque back.

You have to pick your paper or magazine carefully though - it is a sad fact that the kinds of people who both have these problems, and are unable to find alternative methods of resolving them, tend to come from the demographic groups C and D. As such, you need to pick the right paper - the FT is probably a bad idea, the Sun is much better, but for most investors, a local paper is the answer.

(If the terms C and D are unfamiliar, have a look at the article here at Wikipedia which explains them.)

Just as with flyers, however, it is important to remember that people will only call you when they have a problem - and generally expect you to be able to respond quickly.

Personal contacts are the other method of finding people who need help. Of all the methods I have used over the years, this has been the most succesful for me.

Personal contacts, however, take time - there is no substitute for simply letting people know that you buy certain types of property.

Again, 999 of every 1,000 people you talk to may never bring you a property, but the 1,000th may well bring you one that makes you an extra 20,000. That means that, ON AVERAGE, everyone you talk to about what you do earns you twenty pounds.

Viewed in those terms, it becomes a lot easier to pluck up the courage to tell people what you do. So what if they laugh, if you know that every conversation earns you, on average, twenty quid, then you can probably fit what you do into a lot more casual conversations.

At this point, I need to pay tribute to the two people who have helped me clarify my thinking about BMV - Parmdeep Vadesha and Glenn Armstrong, both of whom started in property many years after I did, but built up large, profitable portfolios quickly.

Both Parmdeep and Glenn have training products:

• Parmdeep has a free mini-course, and then a paid for home-study course that goes through the BMV process
• Glenn has an instructor-led one day training course that runs about once a month.

Both come with my recommendation, and you can read more about them (and other products I have found good) here.

This is just the feature article from the October 06 newsletter. Subscribe for market comment, forthcoming events, and more.

---