Using a Credit Card to Pay for Advertising Expenses?

Question

I've always wondered if using a credit card was a viable option to pay for advertising expenses. Some new agents, like myself, don't exactly have a particularly large amount of capital to start with so it would make sense to utilize a credit card to cover the cost.

So hear me out, statistics show that the agents that put more money quality advertising, will generate a greater number of leads, thus, the more money they will make.

Example: In a perfect world, lets say I put $1,000 /month on my credit card to pay for advertising. Within that month, I get 5 potential leads and 2 of those leads close in 50 days. The $1,000 I originally spent would be paid off and only incur a $25 interest charge for those 50 days.

I tried to look it up on Google but I couldn't find any results, so I came here to get others opinions before I do some hastily.

Mindy Jensen · Answer

You don't have to rely solely on high-paid advertising. How long have you lived in your area? If you've been there a while, chances are good you know a lot of people. Tell them you're an agent, and to tell everyone they know that you're an agent. That's free advertising right there.

There are numerous Facebook groups for agents, join them. Get a Twitter/Facebook/Pinterest/Instagram/Snapchat account and use them frequently. Follow influencers in your field, and create witty or informative content. See The Broke Agent...

One of the best pieces of advice I ever saw, was during real estate licensing school. Some guy said he got a nametag on the advice of a friend. He wears it everywhere he goes. It has his name on it, and his title of real estate agent. He gets random people asking him about it all the time! $25 is what mine cost me, and if I were looking for more business, I would wear it everywhere.

BiggerPockets is a vast source of real estate investors. Jump into the forums and give GOOD advice. People read what you have to say, and vote for when you provide value. As your vote/post count climbs, so does your credibility on BiggerPockets. Your vote to post ratio should be around 1/3 to 1/2 or more for maximum credibility. It really doesn't help your cause to have 8000 posts and 9 votes.

Learn your market. Know what properties are selling for both fixed up and in need of TLC. Learn what rents are going for in studios, 1-bedrooms, 2 bedrooms, etc. Become the master of your area.

Take advantage of your free advertising, alongside a targeted, paid campaign. T-A-R-G-E-T-E-D.

Russell Brazil · Answer

At least you understand you need operating capital to be an agent. However I would not bank on being able to close 2 deals in 50 days.  Im a pretty successful agent, and I an go 120 days without closing a deal.  Also any deal I am working on at any given moment, has likely been in my pipeline and being worked for a year or so.

Dawn Brenengen · Answer

@Cody Gentry  You need to exhaust all of your FREE advertising and lead generation before you worry about creating a marketing budget.  I'm pretty successful, and I probably spend a grand total of $200/month on advertising - That's my website/IDX, Facebook ads and my Bigger Pockets membership.

How long have you been in the business?  I get most of my leads from referrals from past clients, my friends and neighbors, Bigger Pickets and various Facebook groups I'm in.  I don't have to pay for any of that!

Jeff Valentino · Answer

Hey there @Cody Gentry. Be careful. Depending on what you're doing they can take months of nurturing to convert.

Also, (at least in my market) advertising has changed in the last year or so. It went from "who can generate leads on FB?" to "how do I convert or stand ut amongst all the advertising on FB?".

What type of advertising/marketing were you planning on?

Cody Gentry · Answer

So either this could go horribly wrong or start me off on the right foot. I still have a savings account from back when I was on deployment but that isn't nearly enough from what I see other agents spending on monthly advertising. If I spent $1,000 a month for six months I'd realistically only get 1 or 2 sales over that 6 month period, correct?

Ross Greene · Answer

If you could convert 2 of 5 leads that would be amazing. Highly unlikely but would be amazing. I think general rule of thumb is more like 1/10 or even more to be honest. Luck of the draw.

Starting out in real estate expect to make your first paycheck in 3-6 months from initially starting.

Jeff Greenberg · Answer

It certainly could work and it also may not.  Be prepared for the long haul.  Many investors have unrealistic expectations.

Using a Credit Card to Pay for Advertising Expenses?

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