Is this worth my time???

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Is this worth my time???

Account Closed
Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes

Hi all!

This is my first time posting (other than the obligatory intro post) and I'm just wondering, is it worth it?

I have been studying and listening to the podcasts for a long time and finally convinced my husband and our two best friends (our partners) to jump into real estate. The problem is that we don't have much extra money for marketing, and such. I didn't have money to buy a list, so I went to the Central Appraisal District and got my own. It took me HOURS and HOURS to sort through all the properties. I don't have money to buy and mail a ridiculous amount of postcards, so I bought stationary and I'm handwriting letters. (I know this isn't scalable but once I get a deal, I can allocate more toward marketing.) The problem is, once I whittled down the list of tax delinquencies, I'm down to less than 200 that fit my model. Is this worth it? Am I wasting my time with so few properties? I don't want to put a list, postcards, and mailings on a credit card, but I will if I have to. What would you do?

Thanks!

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Ned CareyPro Member
Moderator
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
7y

@Account Closed as you are finding out despite what the Gurus say, it does take money to do real estate.  Is it possible to start with nothing, yes. Are you likely to succeed by starting with nothing, no.

The people who do succeed are the ones who persist, and continue to learn and grow.

So is it worth you time? If you persist until you succeed, yes. If you learn something from the experience you can apply later, yes. If you give up before you get anywhere, no. 

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  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Account Closed Welcome to BP!

    First, I am happy you were able to get your husband and your friends to be interested, as that can be a struggle on its own, so kudos to you. 

    Now, to keep them interested long enough to make some money, you want to get some momentum quickly. 

    Is your method a little time-consuming? Yes, I think so, especially in our world of technology and online marketing. Of course, as you know you can do this much better and not break the bank. 

    Handwriting letters? Being there, done that, got the tee-shirt and GOT NO deals from it because you need volume to really make a dent and stand out from the other wholesalers and real estate agents hitting a particular area. You can get companies such as Open Letter Marketing and others to do this for you. 

    Also, I think I read somewhere that you need to send mailers at least 5 times to really get mind space, so frequency is very crucial. Marketing isn't a ONE and DONE approach, it has to be ongoing to have an impact. I guess that's why McDonald's still advertise to us even though we already know that they are down the road. 

    Second, try to find some seed capital to get you started from a marketing perspective, even if it isn't a ton of money. 

    There are other vanilla strategies such as Buy and Hold rentals (small multifamily) that you can also get started when you combine forces with your friends. Think about it...

    Good luck.

    3Reply
  • Payton Pearson
    Member since 2019 · 114 posts · 111 votes
    7y

    Where are you buying?

    If the market is open enough, and you're willing to sacrifice some margin, you could simply go to a trusted real estate agent and look at some listings. The reason for this is to get your feet wet. Buy your first property or two this way, because momentum is insanely critical.

    If, then, you want to find super-awesome deals, you can do the mailing list thing. But, as you know, you only really get responses from maybe 1% of people you send letters out to, at best.

    0Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Colleen Cupp Welcome to BP Colleen! I am in the Dallas area so I can tell you first hand its super competitive. There are a lot of big wholesale companies and investor groups that spend 10s of thousands on direct mail. So 200 postcards is probably not going to get you very far unfortunately. The best thing to do honestly is to find a niche. Something a little off the beaten path that wont have a ton of competition. For example, mine is vacant houses. I spend the majority of my time and marketing and money on finding houses that are vacant.

    Do some driving for dollars, find vacant and distressed property and call those owners and ask about selling. Skiptrace your list of 200 and call those people and ask about selling.

    When you meet with your husband and your business partners/best friends you guys should discuss marketing and a marketing budget. If everyone is able to contribute a little then you have something to work with. If your plan is to BRRRR then you have to have some cash reserves right? Also if there are 4 of you then you can do driving for dollars X 4!

    Unfortunately there are a lot of folks (usually with a hidden agenda) who will tell you that it doesnt take any money to get into wholesaling. Those people are lying. One of the most popular questions on this forum is ‘how can I get started wholesaling with no job, no credit and no money?’ The answer is you cant. As others have suggested you can do some door knocking. Talk to people in your own neighborhood and ask if they know anyone who is interested in selling. Go to estate sales, usually someone died and eventually the property is going to be sold right? There are some super creative low cost ideas out there. Feel free to reach out anytime! Im in DFW as well!

    4Reply
  • Account Closed
    OP
    Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes
    7y
    Originally posted by @Joe Villeneuve:

    Yes you're wasting your time...and money.  The goal is to find quality...not quantity.

    Let me ask you this question.   Let's say you have this list in front of you, and you are about to sift through it.  What are you looking for?  What would make you put aside properties?  What would be your next step with these "put aside" properties?What do you plan on doing with those properties you put aside?

    But, how can you find quality if you don't first look at a lot of properties? 

    I'm putting aside properties that are tax delinquent, SFR, relatively new, in a good neighborhood or a neighborhood that has growth potential. Have sent out some letters already and plan to follow up with a mix of texts, calls, and more letters. I plan to either BRRRR it or wholesale it, depending on the numbers. Is this not how most people do it? Please explain how I am wasting my time and money. I genuinely want to know so that I can adjust accordingly!

    Thanks!

    1Reply
  • Account Closed
    OP
    Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes
    7y
    Originally posted by @Steve Milford:

    @Colleen Cupp When I first started, I put everything on the credit card. The key is to keep finding ways to engage your market until the phone starts ringing. I.e. I test as I go. Direct mail is hard, but it can be useful as a way to gather contact information to start conversations, and the more conversations you have the greater amount of deals you will find. Tenacity is the answer.

    Thank you! I think my husband will not care for putting things on a credit card! Haha! If we have to, we will, though. What CRM do you use to keep track of all your contacts?

    0Reply
  • Account Closed
    OP
    Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes
    7y
    Originally posted by @Account Closed:

    @Colleen Cupp of course, im 18yr old I sent 500 postcards I spent 350$ and im gonna mail it 3 or 4 times, I used my dad's credit card. I just got 6 calls.. 1 appointment,

    That's awesome!! I hope to get the same results!

    0Reply
  • Account Closed
    OP
    Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes
    7y
    Originally posted by @Dennis M.:

    Try handwritten bandit signs I get a call a week later n mine .

     I thought about bandit signs but they're on almost every corner already. I wonder if that will be effective?

    0Reply
  • Account Closed
    OP
    Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes
    7y
    Originally posted by @Anthony Rosa:

    You are getting experience and that means a lot. You put thought into your goal and doing what you can with what you have.  

    How much are postcards? It may be worth it to do postcards on a large scale considering your current postage, paper and printer ink costs. Plus, most likely ou will wind up doing more than your current 200 letterd and the cost will increase. Kind of like averaging your losses.  The more postcards you buy the less it costs.  

     I got info from postcardmania and they quote 5000 postcards for $350. I don't need that many right now, of course (hopefully in the future). I'm assuming I can't have them make that many and then mail them out in rounds? As in, it all has to be mailed out at once? If I could batch them, it would be more attainable! Thanks for your input!

    1Reply
  • Account Closed
    OP
    Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes
    7y

    @Ian Walsh same here. That’s why I’m writing letters. 😆 I’ll do whatever it takes to make it work. Just wanted confirmation that I’m going about it the right way. Thanks for your input!

    1Reply
  • Account Closed
    OP
    Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes
    7y

    @Ola Dantis thank you for your comment! You’re right, I have a lot to think about! My husband and I are currently talking about doing a refi on our current home to pay off some old debt and get into a 15 year mortgage. I may use some of that money to put into my marketing campaign. Can you suggest where to get a solid list from? Thanks for your time and input!!

    1Reply
  • Randall Weatherall
    Real Estate Agent · Memphis, TN · Member since 2019 · 261 posts · 253 votes
    7y

    If you're hustling this hard, go get licensed and kill it for a few years!  When you're comfortable, let the license expire and start with other methods if you desire but this will help get your name out there, get connected and give you access to a lot of resources you can use for side projects as well.  Just a (biased) thought.

    0Reply
  • Account Closed
    OP
    Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes
    7y

    @Payton Pearson thank you, that’s a good idea. I’m in the Dallas area which is super saturated. It might be easier to get some cash flowing properties first, and then look into more options.

    0Reply
  • David Dachtera
    Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    7y
    Originally posted by @Account Closed:

    Hi all!

    This is my first time posting (other than the obligatory intro post) and I'm just wondering, is it worth it?

    I have been studying and listening to the podcasts for a long time and finally convinced my husband and our two best friends (our partners) to jump into real estate. The problem is that we don't have much extra money for marketing, and such. I didn't have money to buy a list, so I went to the Central Appraisal District and got my own. It took me HOURS and HOURS to sort through all the properties. I don't have money to buy and mail a ridiculous amount of postcards, so I bought stationary and I'm handwriting letters. (I know this isn't scalable but once I get a deal, I can allocate more toward marketing.) The problem is, once I whittled down the list of tax delinquencies, I'm down to less than 200 that fit my model. Is this worth it? Am I wasting my time with so few properties? I don't want to put a list, postcards, and mailings on a credit card, but I will if I have to. What would you do?

    Thanks!

    As @Ned Carey pointed out, yes - it DOES take money to do real estate. What people tend to miss is that it need not be entirely YOUR money. Finding, attracting and engaging private money (NOT people in the business of lending out "their own" money, though that form of hard money may be an option depending on the deal) is a key skill. For one of my mentors, his "stable" of private lenders are mostly high-income people - doctors, lawyers, C-levels, etc. - and retirees.

    Getting educated will do at least two good things for you:

    1. It will help you learn how to avoid costly mistakes.

    2. It will put you contact with people who can help you refine your approach based on their own experiences.

    Here's an idea that may be helpful generating your letters ...

    Craft your letter such that little or no recipient-specific information is embedded in the body of the text. Hand-write the letter in blue ball point, leaving room at the top to write in the recipient's address later. Then, scan it and print copies on your letterhead using a color inkjet printer. Then, write in the recipient addresses and sign each letter by hand in blue ball point. Invite friends over for coffee, tea, etc. and have an "addressing" party - hand write the addresses on the letters and the envelopes. Hand-written envelopes have a higher "open" rate than computer-printed envelopes and letters with printed address labels.

    The "party" can also help raise interest in your Real Estate pursuits among your friends. Once you've learned how to introduce them to self-directed retirement accounts and the concept of private lending, they might even become YOUR "stable" of private lenders!

    My $0.02 ...

    2Reply
  • Anthony Rosa
    Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes
    7y
    Originally posted by @Account Closed:
    Originally posted by @Anthony Rosa:

    You are getting experience and that means a lot. You put thought into your goal and doing what you can with what you have.  

    How much are postcards? It may be worth it to do postcards on a large scale considering your current postage, paper and printer ink costs. Plus, most likely ou will wind up doing more than your current 200 letterd and the cost will increase. Kind of like averaging your losses.  The more postcards you buy the less it costs.  

     I got info from postcardmania and they quote 5000 postcards for $350. I don't need that many right now, of course (hopefully in the future). I'm assuming I can't have them make that many and then mail them out in rounds? As in, it all has to be mailed out at once? If I could batch them, it would be more attainable! Thanks for your input!

    Call them and tell them what you want. Maybe they can break the order down, wait some time, then mail next batch.. Talk to them.

    1Reply
  • Account Closed
    OP
    Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes
    7y

    @Lydia T. Thank you for your honest reply. I figured it would probably be difficult in this market. Are tax delinquencies considered a niche? That’s the list i pulled right now. Honestly, I’m considering doing deal machine to drive for dollars but it’s also kind of expensive. Obviously that won’t matter as much once I start getting deals but for now, it’s an obstacle.

    How do you skiptrace? Is it a particular app? Or do you just use white pages and the like to get phone numbers?

    Thank you so much for your input! It’s nice to meet successful investors from your area!!

    0Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Colleen Cupp You are so welcome Colleen! I wouldnt consider tax delinquents a niche because those lists are readily available. A niche would be tax delinquents with out of state owners.

    There is a great REI meetup group called NTAREI that is having a meetup tomorrow night about social media marketing. I will be there, you and your business/investing partners should come! I love connecting with other bigger pockets people.

    1Reply
  • Account Closed
    OP
    Flipper/Rehabber · Rowlett, TX · Member since 2019 · 49 posts · 31 votes
    7y

    @Randall Weatherall thank you for your reply!! The only issue I have with becoming an agent is that it can get dicey if I do a wholesale. Wouldn’t I half to disclose a lot more that way?

    0Reply
  • Payton Pearson
    Member since 2019 · 114 posts · 111 votes
    7y

    @Account Closed Indeed, I can understand Dallas is saturated.

    If you're willing to do out-of-area investing, I've heard Austin and San Antonio are great places. I've lived near San Antonio and visited the city several times. Beautiful city.

    If you're willing to do out-of-state investing, there are exceptional deals in places like Dayton, Ohio. Of course, you'd need "boots on the ground" to ensure you're getting what you're paying for, but the ROIs are quite amazing while still being a pretty decent area. Super cheap properties. To this point, there are books specifically on out-of-state investing on this website.

    0Reply
  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    7y
    Originally posted by @Account Closed:
    Originally posted by @Joe Villeneuve:

    Yes you're wasting your time...and money.  The goal is to find quality...not quantity.

    Let me ask you this question.   Let's say you have this list in front of you, and you are about to sift through it.  What are you looking for?  What would make you put aside properties?  What would be your next step with these "put aside" properties?What do you plan on doing with those properties you put aside?

    But, how can you find quality if you don't first look at a lot of properties? 

    I'm putting aside properties that are tax delinquent, SFR, relatively new, in a good neighborhood or a neighborhood that has growth potential. Have sent out some letters already and plan to follow up with a mix of texts, calls, and more letters. I plan to either BRRRR it or wholesale it, depending on the numbers. Is this not how most people do it? Please explain how I am wasting my time and money. I genuinely want to know so that I can adjust accordingly!

    Thanks!

    You don't find quality by looking for a needle in a haystack.  You have to find a stack of needles.  You do that by learning how to analyze markets first to find that stack of needles.  In other words, you need to analyze markets based on finding one(s) where the market profile matches the criteria defining your financial needs.

    4Reply
  • Charles G. Johnson
    Investor · San Antonio, TX · Member since 2017 · 22 posts · 8 votes
    7y

    Colleen, you are getting advice from everyone, and they are telling you what works from their perspective.  Here's what I have to share with you........go get it!  If one thing doesn't work, try another.  I've tried about everything these folks have mentioned until I found something that worked for me and stuck with it.  Here's the key: do something.  Good luck, and if you're ever in San Antonio, let me know and I'll introduce you to some young guys and gals who are doing really well around here.

    1Reply
  • Dave DeMarinis
    Lender · Santa Rosa, CA · Member since 2017 · 283 posts · 255 votes
    7y

    Hi Colleen - as others said, it is great you convinced some partners to join you. It sounds like you are trying to implement a sourcing strategy to find a property for you and your partners to invest in. The actions you are taking are the same ones the experienced wholesalers do in volume and with expertise. That is work many aren't willing to do, so you are well ahead of the game.

    If you want to perfect your sourcing game and generate the best leads for the smallest cost and smartest activities, I think you should find a wholesaler (maybe @Lydia R. who has given you some great advice) so you don't have to reinvent the wheel. You can offer to do some free work for them or workout a deal where you help them generate a number of leads and then you get to take one down yourself. It doesn't sound like you want to get into the W/S business, so you really aren't competition. You can help the wholesaler in the short term and maybe the long term or you ultimately will graduate to their buyer list. Either way - they win. The meetup is a great place to explore this.

    The free work you would do for them is work you are planning to do for yourself. However, you can do it with them paying the out of pocket and showing you how to generate the most deals. It is definitely worth it! Congrats and good luck. 

    1Reply
  • Account Closed
    Rental Property Investor · Yuma, AZ · Member since 2019 · 637 posts · 46 votes
    7y

    @Colleen Cupp 10 callls now, 3 appoitments

    1Reply
  • Randall Weatherall
    Real Estate Agent · Memphis, TN · Member since 2019 · 261 posts · 253 votes
    7y
    Originally posted by @Account Closed:

    @Randall Weatherall thank you for your reply!! The only issue I have with becoming an agent is that it can get dicey if I do a wholesale. Wouldn’t I half to disclose a lot more that way?

    Not sure about TX, but as long as the fact that you're an Agent and it's in your contract (that they sign, of course) that you are in no way in this transaction acting as a licensed Agent, then it's all good.  We have Agents that do that all the time here in Memphis on the side (obligatory, 'not me' comment).  Just keep in mind that it's illegal all over in a lot of peoples' eyes whether you're licensed or not but access to the info and other Agents/brokerages/events is great!

    2Reply
  • Sebi ArdeleanPro Member
    Investor · Rochester, NY · Member since 2019 · 23 posts · 6 votes
    7y

    @Colleen Cupp as the saying goes.

    Analyze 100 properties – offer on 10 – close 1.

    To me it seems totally worth it! Especially if you can get 2 of those 200 deals. As long as you’ve analyzed those 200 and know they are worth your time and effort, you’re in a great place!

    I would hand write every letter to keep costs down until you have a property under your belt. Brandon even has an article on creating your own handwritten font so you can knock these out much faster while still having that personal touch to you letters. Here’s the link, hope it helps!

    https://www.biggerpockets.com/blog/2016-02-13-create-handwritten-font-for-direct-mail-marketing

    0Reply
  • Joshua Durrin
    Real Estate Broker · Alameda, CA · Member since 2013 · 105 posts · 41 votes
    7y

    @Colleen Cupp, it’s a numbers game that you’re talking about but I can tell you that your hand is going to get super tired really quickly.

    To see how many mailers you need to send, consider some reasonable rates discussed in the podcasts. If I recall, they mentioned the possibility of getting a response on about 2% of what you mail... and you’ll close on about 5% of those. So, out of 200 mailers, you might get 4 responses (200 x 0.02). Out of those you can plan to close on 5% of those, or (4 x 0.05)... 0.2. Put another way, you have a 20% chance of closing on a deal if you service 200 mailers on a campaign over about 8 months.

    If you want better odds at finding a deal, increase your list. And by increasing your list, you’ve just built yourself a full time job of hand writing letters and you’re going to have forearms like Popeye by the end of your campaign.

    You’ll never get a deal if you don’t get the word out there, but consider putting forth more effort developing a scalable business. Put in a couple hours at your day job and hire out the mailer campaign, buy back your time, and then reinvest that time into developing a scalable system. That’s what I would advise.

    Best of luck and congrats on finding the drive!

    - Josh

    RE Broker and Investor in the East Bay Area

    1Reply
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