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I have heard many people say that generating leads for creative real estate investing is a numbers game. That may be very true, but there are definitely things that you can do to make those numbers work in your favor, and greatly improve your odds with less money spent in the process.

Why do we need to generate leads? This is what I tell my students: You must learn and understand my axiom, proven time and time again:

LACK OF LEADS = LACK OF DEALS = YOU ARE OUT OF BUSINESS!

Now this is true of almost every business, but let's look today at a few strategies that I use to improve my cost per lead ratio as low as possible. The first thing I want to discuss is the 'Shotgun vs. Targeted' approach for obtaining motivated sellers.

The shotgun method involves buying a list of several zip codes and mailing to everyone on the list. The other name for this strategy is 'blind archery', because you are essentially shooting a thousand arrows up into the sky, hoping that they actually hit something. You can make a business out of this if you are willing to spend a whole lot of money and are prepared to do this each month because your response rate will be very low.

The other problem with this tactic is that it is impossible to tailor a message to this audience with this approach. Are you looking for people who are behind in house payments? People going through a divorce? Someone who just was laid off from their job? With the shotgun approach you are never going to know.....and it is important to understand that each of these groups is psychologically very different and will respond to different messages. For all those reasons, it will be extremely hard, if not impossible to achieve "message to market match" which is the foundation of a successful marketing campaign.

What works much better is to get the most targeted list you can obtain and write a message to that group addressing their current need and situation. You can get list of people in foreclosure fairly easily, because that's public record and there are probably many people in your local area that compile a fresh list every week and will sell you that list. In all cases, money spent on a well targeted message to a defined group will be money well spent.

You can get lists of people who were listed with a realtor, and that listing has expired. Do you think that the message sent to people in foreclosure is likely to get any response from the expired listings message? Probably not, but that is why you will have a specific marketing piece addressing their concerns (i.e. showing them the local MLS statistics of expired listings and getting their attention).

There are many kinds of targeted lists you can get, and as you gain more experience in real estate investing you will get to know reputable list brokers who can obtain the kind of list you want to market to, and you can create marketing pieces directly to that group that will greatly improve you response rate and solve the first problem that new real estate investors.......getting a lead to talk to.

After a while you will be reasonably able to predict a response rate to your marketing. For example, if I know that in one month I can get 30 responses per 1000 marketing pieces, (a 3% response rate -pretty good), and I know that 5 of these leads will have the makings of a deal, and I know I can close 4, then I have the basis of a business that can provide real wealth in a relatively short period of time.

Therefore, the key to successful real estate investing business is to identify the market segments and market to them using a much targeted message tailored precisely for that list. In my business, I have a very specific sequence of 5 letters with precisely crafted message which is automatically adjusted over time accordingly to the progress of their foreclosure process.

I also use special "linked" letters to target expired listings. Again, they are planned in a sequence and they deliver the message that resonate with homeowners who had worked with real estate agents and did not experience any result, got disappointed when their listing expired without having a buyer.

There are a few other high-response lists that we market to, but again the key is the message to market match!

In my next article, I will discuss how to evaluate responses to determine if there is a deal there or not so you waste zero time talking to people when there can be no positive result.

Marko Rubel is a prolific real estate investor living and investing in the Phoenix, Arizona area, and provides seminars and home study courses to serious investors or those who want to become successful. To find out more, visit http://www.niche2wealthsystem.com and http://www.freewealthcoaching.com or http://www.profitgrabber.com