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?
@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.
@Colleen Cupp knowledge is power as well Colleen. You can always leverage that with someone who does have money, but not the knowledge. And don’t forget to tell people that you are looking for properties as well. Put it on social media, go to meetups, tell friends and family. Just the other day I posted a property on instagram and A buddy of mine was very interest. If I hadn’t posted I would’ve never known he and his partners were looking to invest. Just an alternative or another way to help find deals
That's a good point! I know I have some family that would benefit from getting into real estate. Thank you!
@Colleen Cupp you can squeeze more probability out of door knocking those owners. Find another woman in you're local Reia (reias are too often over looked here on Bp), to be you're door knocking buddy. Hubby's are good too, but we all need other real estate peers / partners / accountability partners.
Watch YouTube videos on doir knocking. Contrary to one's worry folks are friendly and if you give the owner a minute to breath they'll invite you in. :)
I won't lie, the thought of door knocking unsettles me. That may just be something I have to get over. Thanks for the info, tho!!
@Account Closed 200 is a perfect number to start with, and anything is better then nothing. You may or may not get a deal from it but that doesn't mean it wasn't worth it. Real Estate investing is about staying persistent and learning from everything.
Thank you for this!! I must always remember that SOMETHING IS BETTER THAN NOTHING!! My new motto lol
@Account Closed "Worth it" is subjective to each person's own goals, talents, time and tenacity. There are ways to get into real estate without much money, but the process is sped up if you do have some money.
Not sure if you have a "day job" and this is a supplement as you referenced convincing your husband and two friends. Perhaps one of you should pursue being a real estate broker, which would provide an avenue for revenue (commissions from transactions) and would also put you in a position to sell your own properties if the intention is to fix & flip, which would allow for controlled sales costs. It would could also provide a good education by learning the real estate brokerage business, which would assist in comping deals, having access to more data, and making connections with more people in the industry. Of course, you could also outsource this part of the business by partnering with a rock star broker who's willing to work with a new investor without much money of their own, depending what you're bringing to the table in terms of value.
Door knocking, writing letters is free, checking public records, and networking are all free beyond the inevitable time, energy, gas and postage costs that are associated with the effort. Perhaps find another investor further along who has systems in place in your area and see how you can assist them in building their business, and you get the education and system training as part of the deal, and negotiate a percentage of the deal at closing as you find them for the investor.
@Account Closed There are automated mailer services that cost as low as .05c - I always try to think about these things as the value of my time being used on highest / best use. Also, don't forget you can get some incredibly targeted lists from certain freelancers who only work with realtors and real estate investors on Fiverr, UpWork, etc. Anything you are thinking of doing manually, there is usually a service for that that will free up your time on more personalized introductions and conversations. You want to use the education you've obtained and throw up enough stuff against the wall to make it stick - it's a bit of both rather than just one or the other.
Why don't you go and meet with a local (professional) Wholesalers in your area? they are already investing in marketing to get you (buyers) those deals. Or try to find an establish wholesaling firm in your area. Also, network with local brokers, they often times come across with good deals.
@Colleen Cupp Seem like you looking for shortcuts and guarantees. This business didn't work like that.
On the contrary, Anthony. If you read my original post, you'd see that I'm willing to do it the hard way to get it done. I've bought and filtered my own list from the CAD (which took over 20 hours) instead of buying a pre-filtered list from some company, I'm handwriting letters instead of paying for someone else to do the work for me. I'd hardly call that looking for a shortcut. And I never once asked for a guarantee, just a probability, which is talked about often on the podcast. It's a numbers game and I was asking if my numbers are enough. Have a great day!
@Account Closed "Worth it" is subjective to each person's own goals, talents, time and tenacity. There are ways to get into real estate without much money, but the process is sped up if you do have some money.
Not sure if you have a "day job" and this is a supplement as you referenced convincing your husband and two friends. Perhaps one of you should pursue being a real estate broker, which would provide an avenue for revenue (commissions from transactions) and would also put you in a position to sell your own properties if the intention is to fix & flip, which would allow for controlled sales costs. It would could also provide a good education by learning the real estate brokerage business, which would assist in comping deals, having access to more data, and making connections with more people in the industry. Of course, you could also outsource this part of the business by partnering with a rock star broker who's willing to work with a new investor without much money of their own, depending what you're bringing to the table in terms of value.
Door knocking, writing letters is free, checking public records, and networking are all free beyond the inevitable time, energy, gas and postage costs that are associated with the effort. Perhaps find another investor further along who has systems in place in your area and see how you can assist them in building their business, and you get the education and system training as part of the deal, and negotiate a percentage of the deal at closing as you find them for the investor.
Thank you so much for your input! Unfortunately, we all have jobs. My three partners work retail (so odd hours and early/long days) and I am a teacher (often requires more than 40 hours- but holidays are helpful!). It doesn't leave a lot of time to get licensed, at least not until summer.
I wouldn't mind trading my time with another investor, though! Thanks, again, for your insight!
@Account Closed There are automated mailer services that cost as low as .05c - I always try to think about these things as the value of my time being used on highest / best use. Also, don't forget you can get some incredibly targeted lists from certain freelancers who only work with realtors and real estate investors on Fiverr, UpWork, etc. Anything you are thinking of doing manually, there is usually a service for that that will free up your time on more personalized introductions and conversations. You want to use the education you've obtained and throw up enough stuff against the wall to make it stick - it's a bit of both rather than just one or the other.
I didn't know you could get lists from Fiverr or Upwork! Thanks for the tip! Are they expensive?
@Colleen Cupp congrats on getting your husband and friends on board! I’m not an expert, but I have one successful deal under my belt and I’m working on the next one. I am hand writing my letters; I really enjoy the investigation and research process, and mass mailing by a marketing company would take the fun out of it, and what would I do if 20 people were interested in selling? For now, I’m targeting only specific properties that I actually want and that I have the resources for. I’m also not ready to be a full time investor- I’m lucky that I have a full time job working from home- I’m an RN and I’ve paid my dues working hospital shift work! So as of now I’m not interested in wholesaling and I’m not ready to compile a list of buyers, so targeting certain properties and hand writing letters fits with my current “business model.” Good luck and let us know how it’s going!
@Colleen Cupp 💯 it's worth it all is gonna take is one response. Then your metal wheels will start turning. The what if.
I can't say I have done this myself but had a few friends that did and they did the same started small numbers in a real defined area. They made a deal happen I believe it was after the 3 time they sent out the posting. Then he lost money cause he put this first deal under contract that was a bad deal and never tried again.
Maker sure you analyse the area you are mailing to and also maybe do more for diligence in those homes. So you are 99.9 percent ready to make that offer.
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!
1) Don't partner with friends or family(my opinion)
2) The only thing worth your time is searching for deals, don't do anything other then searching for or managing projects!
@Colleen Cupp I would say worst case you are learning. I have generally found that anything that gives you experience is not a waste of time. Keep your head up and stay with it and you will do great at whatever. I don’t personally wholesale or flip but if I did I would take more of an active and targeted approach by making calls and knocking on doors rather then sending out mail and waiting for the phone to ring. But again that’s just my unexperienced opinion, I’m sure there are plenty other people on here that have made millions doing it the other way. Good luck!
Your post doesnt mention exactly what strategy you are trying to pursue. People getting into real estate often have a preconceived notion of RE based on something they heard, saw, read etc. Everybody has a friend who made a "BIG" profit on a deal and it sounds so easy, you figure why not me to. Depending on your preference of strategy to initially pursue, why not begin to familiarize yourself with the free search methods. Set up some Craigslist alerts, check out FB Marketplace. Join a REIA, pic a farm area and become an expert on values in that are so you can spot an great deal when it pops up. Set some alerts of Redfin or some other Free RE portal to send you listings of new, sold , under contract so you start to know your area as good as the realtors serving it. Call all the realtors and introduce yourself and tell them your plans and ask them to send you listings and junky stuff they might not want to list due to poor condition. Sign up for a Carrot website, not free but cheap and populate it with some articles and creative info to generate activity. If you really want to generate leads, the funnel needs tpo be real big at the top. Daily activity it takes time to gain momentum and your persistence level will dictate the results you will get. Keep at it
Your post doesnt mention exactly what strategy you are trying to pursue. People getting into real estate often have a preconceived notion of RE based on something they heard, saw, read etc. Everybody has a friend who made a "BIG" profit on a deal and it sounds so easy, you figure why not me to. Depending on your preference of strategy to initially pursue, why not begin to familiarize yourself with the free search methods. Set up some Craigslist alerts, check out FB Marketplace. Join a REIA, pic a farm area and become an expert on values in that are so you can spot an great deal when it pops up. Set some alerts of Redfin or some other Free RE portal to send you listings of new, sold , under contract so you start to know your area as good as the realtors serving it. Call all the realtors and introduce yourself and tell them your plans and ask them to send you listings and junky stuff they might not want to list due to poor condition. Sign up for a Carrot website, not free but cheap and populate it with some articles and creative info to generate activity. If you really want to generate leads, the funnel needs tpo be real big at the top. Daily activity it takes time to gain momentum and your persistence level will dictate the results you will get. Keep at it
Thank you so much for your reply, Bob! There are a lot of great ideas there. I never thought about going to FB Marketplace! And I didnt know about Craigslist alerts either.
I'm planning on doing some wholesale deals just to get the ball rolling and gain some capital but I would like to get into BRRRR-ing some properties soon.
It's definitely hard to keep momentum up when nothing is happening yet, but I keep reminding myself that I'm playing the long game! Thanks again!
@Account Closedat least you know you want a deal! What are you hoping for returns wise? How much cash would you have to make for it to be worth it?
Honestly, I wouldn't mind making less in the beginning, since I'm learning. I want to start with wholesaling so maybe 3-4k? I just need to gain some capital so I can start BRRRR-ing. I know that I can probably get most of the money for a BRRRR through loans and hard money but I don't think my partners are comfortable with that. Hence, starting with wholesaling.
OK honestly, I have no idea whether anyone that says that 200 is a good list has EVER wholesaled before.
Minimum mailers sent is 3000. A good number is 5000. As an investor you need to have 2 things in place.
A system that targets motivated sellers, and a system that converts motivated sellers into leads.
Without any of these in place you are winging.
Keep in mind the average numbers for DMM is 0.5% to 5% open rate. This is OPEN RATE, this includes people that yell at you. I get it depends on the list. but .. not that much.
For 200 mailers, you will get about 20 mailers returned, and lets take 5% open rate, that is 9 people will respond. Of the 9 people probably all 9 will yell at you most likely.
I really don't mean to be mean. Just realistic.
You really need a lot more than 200 mailers to up your chances for a solid lead.
OK honestly, I have no idea whether anyone that says that 200 is a good list has EVER wholesaled before.
Minimum mailers sent is 3000. A good number is 5000. As an investor you need to have 2 things in place.
A system that targets motivated sellers, and a system that converts motivated sellers into leads.
Without any of these in place you are winging.
Keep in mind the average numbers for DMM is 0.5% to 5% open rate. This is OPEN RATE, this includes people that yell at you. I get it depends on the list. but .. not that much.
For 200 mailers, you will get about 20 mailers returned, and lets take 5% open rate, that is 9 people will respond. Of the 9 people probably all 9 will yell at you most likely.
I really don't mean to be mean. Just realistic.
You really need a lot more than 200 mailers to up your chances for a solid lead.
Thank you for your honesty! That is what my original question was about. I just wasn't sure if I was going to get anywhere with so few prospects. I've also taken to driving for dollars to up my chances of success. Hopefully something pans out. If not, I'll just keep chugging along!
OK honestly, I have no idea whether anyone that says that 200 is a good list has EVER wholesaled before.
Minimum mailers sent is 3000. A good number is 5000. As an investor you need to have 2 things in place.
A system that targets motivated sellers, and a system that converts motivated sellers into leads.
Without any of these in place you are winging.
Keep in mind the average numbers for DMM is 0.5% to 5% open rate. This is OPEN RATE, this includes people that yell at you. I get it depends on the list. but .. not that much.
For 200 mailers, you will get about 20 mailers returned, and lets take 5% open rate, that is 9 people will respond. Of the 9 people probably all 9 will yell at you most likely.
I really don't mean to be mean. Just realistic.
You really need a lot more than 200 mailers to up your chances for a solid lead.
...and, as a followup to this, let's do a math problem here. First a series of questions, and assumed answers...the answers are based on assumptions of what she would like to see as results.
Q1: If a REI mailed out 2000 mailers, what would the desired results be in the form of call backs? A1: Maybe 10%? = 200 leads
Q2: For all those leads, how many times do you think that REI would have to spend calling, leaving messages on A.M and or calling back? A2: Maybe and average of 3 per call back? = 600 calls
Q3: For all those calls, how much time per call (avg) do you think each call would take? This includes quick offs, and full conversations. A3: Maybe 30 minutes per call? = 18,000 minutes...= 300 hours...= 12.5 days of non-stop calling (24 hours a day)
Q4: How much time does a REI really have to make these calls/day?...assuming a 40 hour a week job? A4: Maybe 12...assuming more on weekends...18 if you have no life. = 50 hours a month...= 12 months to make all the calls from the leads.
Q5: How long do you think a potential lead will still be a potential lead? A5: Maybe 1 Month? Why? If they were a good lead, they would have made a decision usually within a month.
Volume isn't the answer...or at least not the best answer. Learn how to work smart. Learn how to analyze markets, based on your REI criteria for minimum returns needed (CF and/or Profit), and resources available. Then camp out in those market(s) where the REI's criteria works
Look for stacks of needles, not needles in haystacks. Time, is a REI's most valuable commodity...use it wisely/efficiently. Think quality...not quantity.