Catfishing Cash Buyers: Are Phantom Ads Ethical?

April 6, 2015 | By | Reply More

2015-4-6-260Hey guys, we had an interesting question recently from one of our subscribers that has to do with something called Phantom Ads, which investors commonly use to build their buyer’s list. And that brings up an ethical issue that we hear all the time…

So let’s bring it to light; here’s the question we got:

“If you’re using Phantom Ads, what is the best response when a buyer asks about the property?”
~ Louis

Before we dive into the ethics of this, let’s quickly define what a Phantom Ad really is.

Fishing for a definition

A Phantom Ad is a technique to generate leads for you. The ad that you put out looks like a deeply discounted property; a motivated seller situation… in order to attract cash buyers to you.

(Much like an online dating catfisher, we are luring investors in with our tasty ad. But as you’ll see, our response makes our version much more appropriate and, well, some might say, ethical.)

A Phantom Ad is a short and sweet motivated-seller type ad, like this:

“3/2 MUST SELL, CALL NOW FOR INFO”

Here’s the catch though (pun intended)… investors post Phantom Ads regardless of whether they actually have said property or not, simply because it’s a way of generating leads.

This is how you reel ‘em in

To answer our original question – when a buyer calls in response to my Phantom Ad, I say something like:

“Thanks for calling, that property is no longer available, but we do come across this type of deal often. Are you in the market for wholesale deals?”

From there, I just kinda lead into asking the caller some questions to find out what kind of deals they’re interested in, what type of property, price range, level of renovation they’re comfortable with, etc…

I happened to be talking with Jp Moses about this recently and he said that a Phantom Ad is actually how he built his very first buyer’s list way back in the day (before Craigslist and online marketing took off). Here’s a bit of what he shared with me…

Catch of the day

Jp placed his ad in the big Sunday newspaper in the Investment Property for Sale section. His logic was that interested investors would be looking in that specific section of the paper. Makes sense, right?

Here’s the actual Phantom Ad that he used, which he purposely spiced up with catchy copy:

“MUST SELL or kill me now. 3/2 in 1300 sq. ft. in U of M area. 13K OBO”

Jp’s ad screams motivated seller! You’d be hard-pressed to find an investor who wouldn’t want to pick up the phone and call about it. It’s basically a guarantee that you’ll get calls. Why? Because it looks like a smokin’ deal and they’re gonna want to beat all the other investors to the punch.

2015-4-6-castAnd, back to Louis’ question again, much like my response to callers, Jp’s approach is similar:

“Oh man, I’m sorry, this property isn’t available anymore, but I do find a lot of props like this. I’m actually a wholesaler, and I come across these regularly. If I find another one like this, would you like me to call you? Would you be interested?”

And of course their answer is ‘yes’ because that’s why they called in the first place! So from there, he’d find out more about the investments the caller is looking for by asking them questions.

The big purple fish we wrangled on our line is named Ethics

Here’s something that Jp pointed out to me… in his response to the caller, he is being 100% truthful by saying, “This property isn’t available.” By wording his (truthful and honest) response that way, he feels ethically okay with Phantom Ads.

It is worth mentioning here that I fully acknowledge that not everyone feels comfortable with Phantom Ads because they technically don’t have the property to offer. And that’s justified. I get that everyone has a different tolerance for what they’re comfortable with.

To those people, we’d simply say: don’t do it if you don’t feel right about it.

Or, perhaps, as Jp suggests, you could tweak the ad a bit and at the bottom include a little disclaimer that reads:

“If you buy houses like these, call me.”

One last fish to fry

It’s also important to think of the end result…

You’re not trying to shaft people, take advantage or scam anyone… you’re just trying to find out who out there would be served amazingly well by the types of deals and opportunities you find.

You are simply creating a scenario where you get their attention – and once you do, you will end up selling houses that they want to buy and everyone’s gonna make money. So you’re using Phantom Ads for good (not evil, mwahahahah!) because everyone involved will likely profit.

USE patrick-signature-image-1-169x300What’s your take?

So, we want you to grab the reel now. Are Phantom Ads unethical? Or are they ethical if you handle them a certain way? Share below.

 

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Category: Marketing, Wholesaling

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