Hey BP community,
I thought I would share our most recent success since it might help motivate/inspire those of you who are starting out. One year ago, me and my partner started two real estate investment companies with not much experience nor money. We owned a triplex each, and I had done one house flip in the past. We were both 25 years old.
A little bit more than a year after we partnered together and launched our companies, we have now completed 6 transactions from wholesale, to house flips and land subdividing.
In the last 4 weeks, we had an incredible run. We bought 3 off-market houses, two of which we will flip, and one of which we will soon sell as is. How did we do it? Quite simple, actually.
We decided we would invest in a part-time employee even though we didn't have much money at hand, but we needed to move faster and she could help free up some time for us by completing mainly clerical tasks. We are paying her $15/hour and $1000 bonus every time we close a deal that she brings to the table by simply sending in letters to potential sellers for off-market properties. I trained her and showed her how to find great deals, and we provide all of the necessary material for her to do a proper job. She started working for us 3 months ago, and we closed the last 3 deals because of the letters she is sending out every day. She is sending an average of 200 letters per month to targeted sellers. Yes, you need to send a lot to get a decent rate of return.
Our total cost for her hours worked, bonus paid out and necessary material to send out letters will be around $7000. Our expected net profit on these three acquisitions is 90k, conservatively speaking. Therefore, our return on investment will likely be around 83k, or 1285% if everything goes according to plan.
The lesson is, don't be afraid to invest if you want to grow faster and get results. It worked for us! Check out my blog (found in my signature) to follow the rest my real estate journey.
Great story @Guillaume D. ,
What type of marketing did you have her doing? What groups did you target? Did you all or did she do the negotiating?
Are you really only sending 200 letters per month or was that a typo? It seems that 3 deals in one month from 200 letters is an incredible return. Am I missing something?
@Brionne Moss For now, she is only sending in letters. The more experience she gets, the more tasks we will be able to delegate. We target people that inherited from a house or apartment building, as well as people who will soon lose their property to the bank.
@Patricio P. She started 3 months ago so that would be around 600 letters sent. It just so happened that we closed 3 deals in the last 4 weeks, meaning we weren't able to close anything in the first 8 weeks.
@Guillaume D. Wow! That is an incredible purchase rate on 200 letters! I think most investors would agree that you could expect to buy only one or two houses from 2000 letters.
@Larry T. It's actually 3 buys for 600 letters so technically, 1 per 200 letters as you say :)! We started this initiative 3 months ago. It was just our lucky month when we closed 3 in a very short period of time. We did not close anything for the first two months.
When it rains it pours!! Congratulations on the deals! Persistence pays!!!! Keep hitting those leads!
@Ryan Billingsley Thanks a lot :)!