Week 2: Starting Marketing

Week in Review

This was a difficult week. I am working to set up marketing and it is not easy (or cheap). I had renovation work really ramp up at the Byers Ave house, and life came into play. My wife is a school teacher. She works for a charter school that is all online. This has been such a blessing for us because it meant that she got to make money, do what she loves, and spend time at home with our kids. Recently she found out that the charter is closing. She is working to find another job at a brick and mortar school and has interviews already lined up. It just means our kids are going to have to go into at least part-time daycare. I am very dedicated to getting my real estate investing rolling and am spending 60+ hours a week setting up processes, reading books/blogs/etc., analyzing deals, and managing the deal I currently have working. It makes me sad but I feel like this is my first big challenge in my real estate career this go around.

This is why I wanted to keep this blog. To talk myself through these issues that come up that make me just want to run back to the corporate accounting world where I feel safe and comfortable but in reality, where I would be trapped.

Current Projects

BUYERS AVE – Demo is done and today we got framing in for a new utility room and removed a wall to open the kitchen to the living room. Tomorrow our new hallway should go in. Ran in to some very minor snags, we will need to add a light in the new hallway (don’t know how I missed that one) and the back door was not part of the GC’s quote. I am giving the old refrigerator to the GC in return for installing the new back door. Easy and cheap fix. I like that. The GC is taking responsibility for missing the light and is getting that in for free. I LOVE THAT. Don’t expect that. I should have had that on my scope of work I gave to the GC. Whenever you take quotes from a GC please have your own scope of work done prior. That way all your bids will be equal and it gives less room for the GC’s to inflate their profit. It shows you did your homework and you know what you are talking about. I also suggest you create a materials list for finish out. Seems like most flippers do this to make sure the finish outs flow throughout the house.

Marketing

I still have not been getting any good leads from my wholesalers which is forcing me to really take seriously my ideas of venturing into seeking out motivated sellers myself. I am looking at a few options and am down to four main areas:

DRIVING FOR DOLLARS – I have about four areas that I am focusing on so It is reasonable that I could drive an area in about four hours each looking for homes in distress, vacant homes, or for other markers. For example, when I was driving a neighborhood yesterday I saw a constable walking up to a house with some papers. I stopped and took note of the address. This is someone being served papers of some sort. It really doesn’t matter what was being served because I know that the owners are having issues of some sort. The real benefit about driving for dollars is that you know it is a house that you would want to work with in an area you choose. The mail you are sending out is going directly to a house you want. No wasted money but it does take quite a bit of time. To save money on mail later, I take a stack of very short handwritten notes that I copy as I am watching TV before bed. I’ll stick these on the door handles on the homes that I don’t want to wait for direct mail to get to them. I don’t stop and put them on every door that will go on my list. I have only done this once so far. I will let you know what response rate I get.

WEBSITE – I am still considering the benefits and drawbacks of a lead generating website. Some cons are you never really know how motivated these sellers are, if they will fall into an area you work in, and it takes a lot of time to call back all the leads. The pros are a very passive way at getting leads, most people use the internet to research and solve problems, could lead to wholesale deals when a property isn’t in your target area. The costs can range greatly. It all depends on what you are looking for. I am looking for something low-maintenance on my end so I am considering LeadPropeller.com that offers full service web set up for a motivated seller lead generating website for $49/month at the time of me writing this. I may be pulling the trigger this weekend. I will let you know how it goes.

DIRECT MAIL – This is quite a bit more expensive. First you must get a list of leads. You will have some leads from your driving for dollars but I want more than just the small handful of leads. If I am going to print postcards or letters I will want to print in a large quantity to get a good deal. The printer I am working with charges $51 for 1,000 postcards glossy print and double sided. The lead site that seems to be most popular is List Source which from the pulls I have ran gave a cost of $0.18/lead. When you are pulling in 1,000+ leads this all starts to add up quickly. I have also looked at using a site like Propelio which pulls legal filings like probate, divorce, bankruptcy, and foreclosure proceedings. This is a flat fee of $89/month but is only available currently in the Phoenix area, DFW, Austin, Houston, San Antonio, Miami, and Palm Beach, FL. It also gives you direct access to the MLS and CMA (comparable market analysis) reports.

BANDIT SIGNS – I am not sure about putting these up. From what I have heard, you can get roughly 1 call for every 10 signs you have out each week. The down side is they are illegal in nearly every town and don’t stay up for a week. I found the cheapest place for these to be Signs on the Cheap which offers them at $0.89/sign for one-sided print.

Questions I am Working on

-How to manage leads once I get them?

-What metrics to target when getting lists for direct mail?

-Have you shared your dream of real estate with anyone? I have only told friends prior to this past week. I just recently told my brother who used to be my business partner and he was very happy for me. I have yet to tell my parents because I know they will be less approving. They weren’t supportive the first time around when I was making great money. I will eventually tell them and let you know the reaction I get.