BiggerPockets

There is no set rule. It depends on you and your goals. For me, 20% would be too high. It would mean that I would be forced to work a lot more or hire staff, neither of which I want to do.

I'd start from your goals and work backwards. What do you want to accomplish in 2013? What will it take to get there? How much marketing? What kind of marketing? Write your marketing plan now and create a budget for it. That's how much you should spend.

You FIRST have to determine what your bare minimum required return is on marketing and if it is working??

Example for every dollar spent you require a 2 to 1 , 3 to 1 , 4 to 1 ratio.

So for 50 cents you get back a dollar, 33 cents a dollar, 25 cents invested for a dollar etc. If you set the minimum and can meet that goal then you keep that marketing in place. You tweak it until you max your percentage of return and then set on auto pilot and then put another marketing campaign in place to add to it.

If after tweaking something over and over and it doesn't perform to your thresholds then you dump it. When you have XX amount of dollars you want them to work as hard as possible for you.

The biggest thing before putting back into marketing is living below your means.

So fi I make 200,000 a year I live like I make 50,000 a invest the rest. As money my grows and grows and I move up the ladder I can increase my lifestyle accordingly without overstretching myself.

Many people with marketing or lifestyle go too big too soon. You have to be patient and have self-control and it will pay off big rather than blowing through everything in the moment when you get a taste of success.

There is not a set percentage. Start small and tweak your message and when the return is really good then ramp up the volume. Many throw out a one shot deal mailing a ton with a wrong or weak message or focused on the wrong target audience. This results in them losing money and going out of business. More is not better in the beginning.

Like @Jon Klaus stated it all depends on your goals. If you generating solid cash flow and have enough for a rainy day with a repair or something else then your marketing budget can go up.

Originally posted by Brandon Foken:

My question is: Does your broker have any problems with you being an investor versus a full-time RE agent? In a few weeks I will be starting a direct mail campaign. The end goal after being licensed would be to wholesale houses from distressed/motivated homeowners and to list others that warrant full retail pricing that way I have multiple revenue streams. I'm wondering if a broker would have a problem with me wholesaling some houses while listing others. Would they want all of the action? Would there be some sort of conflict of interest? I know it may be hard to answer in specifics but am curious to know your general thoughts on the subject.

The big brokers (Re/Max, Century 21, Coldwell Banker, etc) are going to be more old-school and are going to be looking for people who more interested in being full-time real estate agents vs investors or part-time agents.

But, there are plenty of medium sized and small brokers who will be happy to have you -- they won't require office hours, they won't have a minimum number of deals you have to do, won't mind you wholesaling, etc. Even some of the bigger ones (Keller Williams, for example), may be more open to working with investors.