Throwing Away Your Pay Day

Following up with your leads? Discontinuing marketing after a couple mailings or a short online marketing cycle? You could be throwing away your pay day.

I’ve never executed a contract following the first phone call. Not the first, second, or third. It takes months – in some cases over a year – to agree on price. After executing the contract, you have inspections, searches, extensions, re-negotiations, several weeks to close. If your flipping the property, months of rehab and time to sell. It takes months of advertising just to get the lead’s phone call. All this before you earn a dollar. Marketing profits take a long time to absorb – but when done right exceed costs. Everyone nods along that it takes time for motivated seller marketing to generate leads, deals, and profits. But are you actually applying this to your business and marketing analysis?

A red flag you may not be is after several months of marketing, you have yet to net a deal, and you conclude your marketing isn’t profitable. People at your local REIA start asking “did you get a deal”? You hear stories about wholesalers doing massive deals sending out 5 yellow letters. “Gurus” talk about paying thousands to join their program to get 2 deals a month. I saw a Facebook re-marketing commercial a month ago with a guru walking out of a mansion saying “if you are ready to make millions sign up and use my postcard.” I almost spit out my coffee. Another red flag you haven’t really accepted that the profits come down the line is if you haven’t developed a great system to document leads and schedule follow-ups.

The truth is, as stated by Grant Cardone: “Disciplined, consistent, and persistent actions are more of a determining factor in the creation of success than any other combination of things.” Of course, persistent action needs include improving your marketing while allowing sufficient time for data to collect.

Sorry if you don’t want to wait but this is how it goes. You can stop marketing or quit, and but you’re missing the pay day. In the meantime, track lead acquisitions per dollar (be careful how you define acquisition though) and variety of metrics online.

An exception is if you’re strategy is to make small wholesales frequently then yes – you better be doing a lot of deals fast. Not my cup of tea but to each their own.

To show how this works in reality, I’ve outlined my most successful recent deals as well as some contracts that didn’t work out:

• On September 9, 2016, personal representative called in after receiving probate letter. I first mailed this seller in March 2016. The seller openly advised as to his number, I countered, and seller rejected it. I followed up with some phone calls and e-mails in October, November, February, March, April, May, June. We executed the contract in early July and closed last week - 16-months after the first direct-mail contact and it will take 5 months to close the flip. This is my fourth probate deal, and the first one two years ago covered probate mailing costs through three years. It took 8 months of letters with business cards to get my first probate deal. When it finally came, profit was 5 times the cost.
• On July 19, 2016, I received a missed phone call to my marketing line. I called the number every week until the owner picked up on September 15th – and advised he was not interested in selling. This call was from a list I had been marketing to back in April 2016. I followed up at the end of 2016, February 2017, and in April 2017 executed a contract. This came 12-months after my first direct-mail contact. Unfortunately, this deal didn’t work out because defects were revealed during inspection. It still demonstrates even a missed phone call can become a deal a year later.
• On December 3, 2016, out-of-state seller called in after receiving a postcard. I first sent a postcard to this lead in September 2016. We agreed on price, and I went out to inspect the property with my GC. It was in worse condition then described: needed a complete and total renovation. After advising the seller concerning the condition and that I needed a lower number, seller refused. I followed up at the end of December, January, and in February. Seller agreed to the number I had proposed and we closed early March. 6-months after the first mailing.
• On January 31, 2017, a condo home seller called in after seeing my Google Paid Ad. The next day, saw the property in person, and made cash offer, which the seller rejected. I followed up mid-February and seller indicated she had a higher offer. It was a wholesaler that backed out. I checked in again at mid-March, and the seller was working with a different wholesaler at a “higher” number. Canceled again. At the end of March, seller had enough of the wholesale run around, agreed to our number, closed end of April. This is my second Google Paid Ad deal.
• On May 5, 2017, received a phone call from an SEO hit to one of my city landing pages. Seller requested price out of my range and explored other offers which did not work out. I followed up several times, we agreed on price recently. Still a long way to go, but SEO costed zero dollars and my Windows calculator says “Cannot divide by zero”.

Do you see how I wrote down every date and occurrence with each lead? I meticulously document every single interaction with every single lead because I accept the reality it will take a long time to get the deal and I won’t be able to recall events from a long time ago.

Closing “great deals” never happens on the first phone call. You can’t judge the return on your marketing in the first few months. One discernable difference between direct-mail and online leads is online marketing close faster (see my last blog about in-bound vs. outbound marketing). If I stopped every marketing campaign that didn’t “get a deal” or have ROI within 4-months to 6-months I would have quit a long time ago. Throwing in the towel equates to throwing away the pay day.

I still don’t believe think my marketing from 2014/2015/2016 is finished churning. My CRM has years of leads that haven’t yet sold. Hopefully, there’s a few more deals in there : )