Growing Your Real Estate Investing Business
Growing your real estate investing business is certainly about doing the work that it takes. But it is also about being crystal clear about where you want to go. You won’t get there no matter how much work you put in, if you don’t have a clear vision of exactly what you want your business to be. What do you want your business to look like in one year? In five years?
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Once you have answered these questions, you can begin to craft a plan to get there.
Where do I start?
What is your grand vision for your business? I am a full-time wholesaler, so my vision would be a little different from that of a landlord or a rehabber.
For instance as a wholesaler, I might have a monthly income goal; a certain amount that I would like to make each month. If I were to say, “I want to make $15,000 each month”, my next question would be how can I get there? How many transactions would that be each month?
In some areas, that might be one wholesale deal a month. In other areas, it might be two or more. Let’s just say for now that it’s two. If I need to buy two houses each month, then how many leads do I need? Most folks will say that you need to talk to about 20 people in order to find one viable lead that turns into a deal. That’s a pretty good statistic so we will just use 20 leads as the number we need. Therefore if you want to buy two wholesale deals each month, you will need about 40 leads every month.
What is the next step in the process?
The next step is to determine which marketing strategies you plan to use to get those 40 leads.
Maybe you plan to use direct mail marketing. How many pieces would you need to send out to get 40 leads? Direct mail usually gets between a 3%-6% response rate. You might wonder why there is such a difference in those two numbers. It’s because there are a lot of variables such as the mail piece you use, the timing of your mailing, and the quality of your list to name just a few things. There are many factors that go into a successful direct mail campaign.
If you need 40 leads, assuming a 4% return on your mailing, you are probably going to need to send out around 1000 pieces. If you are planning to use direct mail as one of your lead generating strategies, then I recommend that you do send out at least 1000 pieces of mail every month. You get a higher response rate from direct mail over time so it’s important to be consistent.
Why not mix it up?
Rather than just using one marketing strategy, why not have a direct mail campaign, put out some bandit signs, and set up a website to collect leads? Try several different strategies to get your phone ringing. Find out what works best in your area and implement those strategies.
Never under-estimate the power of networking. Make it your goal to meet and get to know people in your industry. You should also attend functions that are not directly related to real estate. You never know where your leads will come from. No matter which strategies you decide to use, don’t put all your eggs in one basket.
The 3 step plan
- Develop a crystal clear vision that becomes a roadmap for growing your business.
- Decide on 3 -4 marketing strategies that you will use and master these before adding others.
- Know how many leads you will need each month to meet your goals, and then create a plan to get these leads and stick to it.
Success comes to those who not only have a plan, but diligently work the plan.