The Perfect RE Investment vs A Million Monkeys

by Jeff Brown

Real Estate Investments Broker

Author website

I write this note as a quick reminder. Investors in buyers’ markets as extreme as we’re currently experiencing will sometimes fall victim to what I’ve called ‘Million Monkey Syndrome’. I suffered from it when I was young and thought nothing was impossible for me in a market full of highly motivated sellers. It was through a marketing experience of all things, that I learned to recognize the signs of MMS.

Back in the day, one of the ways I used to market was through very narrowly targeted mail. Only investment property owners were on the list. I quickly found out what generated calls and what didn’t. The problem? It was a tad difficult to always have the ‘perfect’ small income property for sale. 🙂

A solid response rate according to direct mail pros would be 1/2%. Back then my average mailing wasn’t large, maybe 1,500-3,000 letters. The average response rate was almost always at least 1/2%, and many times 1-2%.

Then I sent The Letter.

It generated just over a 4% response rate for 3,000 pieces mailed. The calls started on Tuesday, and by Thursday I’d developed a love/hate relationship with my phone. 🙂 By Friday my assistants were afraid to answer it.

What magic words caused this embarrassment of riches? Turns out I’d discovered what made the East County (EC) small income property investor get very excited. The letter told them of a La Mesa (most desired area in EC) duplex that could be purchased with 10% down. Also, the owner would carry secondary financing. And the duplex needed some TLC, because it was a ‘cosmetic fixer’.

A light fixer in the most desired area, with owner financing and only 10% down! I’ll take a dozen to go please.

There hasn’t been one of those available since the year I sent that letter — 1999.

For the record that very letter generated over $250,000 in commission income. It remains the all time best producing letter I’ve ever sent.

I’m taking the out-of-the-way scenic route in order to say this:

Stop wasting your time and therefore your money looking for the perfect property or situation. The stars don’t align that often. Meanwhile you’ve passed over who knows how many excellent investments because you couldn’t find the right rainbow with the pot of gold that had your name on it. This is especially true in markets heavily tilted buyers’ way, as they tend to get a little cocky with their new found power. It’s a self-set trap into which you don’t want to fall.

There’s a better chance of a million monkeys in a room full of computers writing Romeo and Juliet than you finding the perfect property with all the perfect circumstances attached to it, and owner financing.

Decide what you’re Point B is, and what kind of property will best get you there. Buy the best properties you can locate in a reasonable time. They’ll close escrow. Then….

Live your life.

Repeat until you see the sign for your Point B turnoff.

Retire.

Send me a card from (insert your favorite ‘paradise’ here) saying “wish you were here.”