Ok, starting to freak out!! Advice would be appreciated!

Marketing Your Property
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Ok, starting to freak out!! Advice would be appreciated!

Amanda Fox
Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes

Ok, I'll try to make this concise. My marketing budget is $1500/mo. Our original plan was: bandit signs, direct mail to absentees and drive for dollars, email blasts, and network with wholesalers. We are a couple months into our marketing and here are our results. DIRECT MAIL: 1 mailer sent to 600 absentees, 1% call response rate, 0 leads. BANDIT SIGNS: I HATE THEM. My conscience has won out, but I have 500 signs that we bought before my conscience got loud enough, I contacted all the cities in our area, determined we could (still gray area) post signs in ground on Fri, remove on Sun. That approach, not surprisingly is not super effective. 1 call/30 signs.

Mail is not more effective, I think, because there are 7 other investors mailing to many of the same addresses (we asked one of the callers). It's actually a really good response, probably, given that competition.

So... here are my questions: 1. can I be a successful investor without bandit signs? 2. Am I wise to dig in deeper with direct mail, continue to mail to the 600, work harder/do more research to obtain more motivated seller lists, ramp up majorly our drive for dollar strategy. 3. What are your thoughts about replacing bandits with 1 large billboard in a very busy location. 4. What would you do, philosophically and practically if you were me.

Our goal, btw, is to be a large investment business, not small, flipping and wholesaling 5-10 properties/month SFR and MFR. We (my hubs and I) have limited experience on the flipping side and extensive experience on the real estate side. Please help, we're floundering!

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Tim G.
Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
13y

Sounds like you just got started, Rome wasn't built in a day.

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  • Tim G.
    Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    13y

    Sounds like you just got started, Rome wasn't built in a day.

    5Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    13y

    @Amanda Fox Welcome to BP! First off, I am not a flipper. We do new construction, and are licensed agents as well.

    What are your local market conditions? It would seem that Santa Cruz would be like Orange County, extremely competitive! If so, you might want to narrow down your focus to a niche that fewer investors, and agents are working, or farm a specific area that has a lot of older homes in need of remodeling, that is in a good school district, etc., and would justify rehabbing.

    I'd also read the Beginners Guide to Investing, and scour the forums for information. Though you, like I, are experienced, one thing I learned very quickly on BP is that sometimes there are other investors that have a different viewpoint than we as agents, contractors, etc. have. They may work a niche we don't know, or ? All of us can learn something new.

    As for marketing, let's invite @Sharon Vornholt to join in, and maybe

    @Will Barnard , he does high end rehabs in so Cal, much like Santa Cruz.

    0Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    13y

    For whatever reason the @mention didn't work for Sharon, so I'll try again.

    @Sharon Vornholt

    0Reply
  • Account Closed
    Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
    13y
    Amanda,

    You might get seller's attention if you put in bold letters, we are cash buyers ready to close.


    Joe Gore
    0Reply
  • Amanda Fox
    OP
    Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
    13y

    @Karen Margrave Thank you so much for your response and bringing some other folks in!! We are completely new to marketing, I have spent a ton of time on BP over the last 3-4 mos soaking up as much info as possible. We actually just moved to Denver. We had been looking for investment properties on the MLS for 2 years in San Jose. Denver is active, but not nearly as much as San Jose. On the MLS in Denver (which we have completely stopped looking at) there were 2-3 other offers (we put in 4 offers), 25% of offers all cash, offers accepted within 5-7 days. Direct Mail competition 7 other investor letters approx. to absentees, no other bandit signs seen (cities very actively shutting down), large pool of houses overall.

    I mainly need general direction advice, I feel pretty confident in researching how to implement different strategies well, but had a general marketing plan that now seems to be struggling and moving much slower than anticipated. Maybe this is normal? THANKS AGAIN!!!

    0Reply
  • Anson YoungBusiness Member
    Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
    13y

    You cant really judge the campaign off of ONE mailing, unfortunately.

    Also, we picked up 6 properties straight off MLS, just this month.

    You are starting in a new city with no prior experience, there will be tweaking and a learning curve. You have to let marketing set in over the course of many hits. I've sent out 1000 with ZERO calls.. talk about sweating bullets!

    Podcast Guest on Show #235
    0Reply
  • Mark Ferguson
    Flipper/Rehabber · Greeley, CO · Member since 2013 · 2k+ posts · 1k+ votes
    13y

    @Anson Young

    impressive! We are getting deals off of MLS as well, but not that many.

    Anson is right, it takes a very long time to learn how to do this business full time. You are starting out in a brand new market, with few connections and little experience. From what I have heard it takes 5-6 letters to get to the deals. The first letters will produce the fair market sellers and the sellers who are motivated won't respond until they are reminded over and over.

    There are flippers in the area who have been doing this full time for years/decades and don't do one deal a month. We average one deal a month and I feel like we have more volume than 99% of flippers in our area.

    0Reply
  • Jerry PuckettPro Member
    Wholesaler · Fort Worth, TX · Member since 2010 · 1k+ posts · 1k+ votes
    13y

    Hi @Amanda Fox ,

    I agree with @Tim G. 100% (as usual). You are at the very beginning. No matter your experience, talents and abilities, you are at the ground floor, the very beginning of your marketing curve. It takes TIME to build that machine. I'm hoping you are not of the type that takes a few piano lessons and immediately wonders why the cannot play Mozart....

    Direct mail. Your budget looks healthy enough to produce fruit, but without knowing any of the specifics, I really can't comment. One observation however is that you've sent 1 mailer to 600 names. In the world of marketing, that's even less than a drop in a bucket. Stay consistent and you'll out last all the others mailing to your prospects and be the one in place when the circumstances are right.

    Take the time to build your machine and it will do exactly as it's supposed to: spit out deals on a regular basis

    2Reply
  • Shaun Reilly
    Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
    13y

    @Amanda Fox

    As others have said I think the main thing is not to get discouraged at this point as you are just getting started with your direct marketing in a new market.

    I'm sure it is extra frustrating since you have been looking for a while in CA before moving so it isn't just a month overall for you guys.

    Not an expert by any means in direct mail but you hear over and over that you have to keep following up and you will get better results the deeper into a campaign you get. If the list still isn't getting you any leads after 4-5 pieces maybe there is a bigger issue.

    For other options driving for dollars will always be a solid option and you will have to decide if you are okay with doing bandit signs or not.

    I would agree with the point made by @Anson Young that there is no reason to avoid the MLS. Don't put all your eggs in that basket but getting a license (I believe elsewhere I read your husband is a broker in CA?) or working with a realtor to look over things that are listed can only help. Also that is the only avenue to get at REOs or Short Sales which might not be as plentiful anymore, but are sure out there still.

    If you are tapped out monetarily for marketing you can still do the easy stuff like place ads on Craigslist and answer ads on it as well.

    Lots of options and you are off to a good start getting your message out there!

    0Reply
  • Dev HornPro Member
    Flipper/Rehabber · Arlington, TX · Member since 2013 · 1k+ posts · 2k+ votes
    13y

    DITTO @Tim G. !!

    Every new business goes thru a start-up period. Commit!

    "There is no scarcity of opportunity to make a living at what you love; there's only scarcity of resolve to make it happen." ~ Wayne Dyer

    Hang in there @Amanda Fox

    1Reply
  • Sharon Vornholt
    Goshen, KY · Member since 2009 · 835 posts · 683 votes
    13y

    @Amanda Fox -

    Like everyone said, you are just getting started.

    Direct mail campaigns are something that you repeat over time. I have written several posts here on BP that have some statistics in them (you can search through my posts).

    You will get something like 85% of your deals at or beyond your 5th mailing. That is not to say you won't get a deal before then, but you have to keep mailing to those same folks again and again.

    Most people send out a couple of mailings and then throw in the towel. You want to be there when everyone else has quit. And to have only 7 competing companies in an area as big as yours is actually very little competition. When you get the call, learn to "sell yourself" better than the rest.

    Another tip is to find out what that "something else" is that they need. It may be moving money, they may want you to clean out the house, they may want something totally different; but there is always some other problem to solve or something else they want or need in addition to the money. Good luck.

    Sharon

    2Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    13y

    You asked for direction, I think you are already headed in the right direction. As everyone has stated, one mailing with no success is not equal to no success. It is only the first of many steps it will take. If you get discouraged this fast and have such high expectations, you will likely fail and likely continue to be disappointed. Often ties, the magic number is 7 meaning it may take 7 mailings to that same person before it lands you that deal.

    Consistency is just as important as the quality of your mailing list. Keep plugging away and make sure your people and communication skills are ready to rock.

    Podcast Guest on Show #130
    1Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    13y

    also, you should be going after two of the three means for acquisitions. Direct marketing is one and making lots of offers on the MLS is two. Do them both at the same time. When I say lots of offers I mean 100+ each month.

    Podcast Guest on Show #130
    1Reply
  • Shaun Reilly
    Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
    13y
    Originally posted by Will Barnard:
    also, you should be going after two of the three means for acquisitions. Direct marketing is one and making lots of offers on the MLS is two. Do them both at the same time. When I say lots of offers I mean 100+ each month.

    @Will Barnard

    What are you saying the 3rd way is?

    0Reply
  • Bryan L.
    Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    13y

    @Amanda Fox - Why in the world do you want to do 5 - 10 deals per month? Do you not like sleep? Or golf? Or skiing? Or eating? The whole point of this business is to make a good living while working LESS, and to enjoy life and to smell the roses along the way. If you truly do 5-10 deals per month, you will be working your self to death. You may be the richest darn investor in Denver, but what's the point of having money if you have no time to do anything with it? My flipping provides about half of my income for a modest middle-income type of family. And I'm looking to flip 3 houses this year. Been on vacation 4 times this year already. Quit work early last Thursday to take my daughter and the boat to the lake. There were VERY FEW people there on a Thursday afternoon. We had a blast. Enjoy life.

    5Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    13y

    @Amanda Fox We moved to Orange County CA from Shasta County after the market crashed. We went from knowing every parcel in the County to an area with millions of people, various cities, and a wide array of regulations specific to each one. We are developer/builders/brokers.

    Our plan was to go to the planning and building depts. in each town, talk with them, talk to other builders, etc. and find out which areas were best to work with. Some of the issues like dealing with Coastal Commission, etc. are things we've never had to deal with, and thought we'd stay away from those properties (unless they are already through the planning process).

    Now, after a few years, we are up and rolling. I'd suggest the same for you. Get to KNOW the local market, go to open houses, scour classifieds, etc. Soon you'll be able to choose the best areas to target, then go full bore! Good luck. Sharon Vornholt has written some great posts on blogging, I'd suggest you look at those, it may help you tremendously by giving you another way to connect. Also, the REI meetings, etc.

    0Reply
  • Amanda Fox
    OP
    Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
    13y

    @Anson Young Tell me if I'm prying too much, but are your MLS deals buy and hold? Do you follow the 70% x ARV rule? Are you networking with realtors? Your comment threw me for a loop since we were working the MLS for a long time and didn't yield anything. We must be doing something really wrong. :)

    @Sharon Vornholt Thank you for your comments!! The original 600 that we have sent 1 mailer to is an absentee, high equity list. We have been contemplating pairing down that list by taking steps to make it more valuable addresses (driving to look at them, doing further research), and eliminating a bunch of those. We only have a max of 1200 addresses total that we can afford to mail to, and we would supplement that paired down list with other higher value addresses (drive for dollars, probate or inheritance maybe). If we can only mail to 1200 addresses total, wouldn't it be better if they are 1200 really good addresses? But would you suggest we just keep mailing to that same general list and not pair it down?

    @Mark Ferguson Thank you so much for your comments, good to come back down to earth every once in a while!!

    I really can't say enough how much we appreciate the input and encouragement!!!

    0Reply
  • Amanda Fox
    OP
    Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
    13y

    @Sharon Vornholt I don't think the tagging worked, so here goes again: Thank you for your comments!! The original 600 that we have sent 1 mailer to is an absentee, high equity list. We have been contemplating pairing down that list by taking steps to make it more valuable addresses (driving to look at them, doing further research), and eliminating a bunch of those. We only have a max of 1200 addresses total that we can afford to mail to, and we would supplement that paired down list with other higher value addresses (drive for dollars, probate or inheritance maybe). If we can only mail to 1200 addresses total, wouldn't it be better if they are 1200 really good addresses? But would you suggest we just keep mailing to that same general list and not pair it down?

    0Reply
  • Amanda Fox
    OP
    Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
    13y

    @Bryan L. I LOVE your bluntness - hah!! We just moved to Denver from CA where my husband was a corporate pilot who was gone ALL THE TIME. We do not have any income currently outside of real estate investing and will need to replace a full income with the investing, not half. We are very sensitive at living a full life and valuing time with our kids, etc. so I think I'd rather go big, get there and decide it's bigger than we need than go small, not really get there and have to have my husband go back to flying and missing his kids grow up.

    Oh, and the other big oh, is I REALLY love flipping real estate. I worked for several years rehabbing commercial properties and it was awesome. And I'm obsessed with outsourcing and growing a big business that doesn't need me to be there 24/7 to run it. I really do think our head and our hearts are in the right spot with our philosophy, but I always appreciate a good gut check - thank you!!!

    1Reply
  • Anson YoungBusiness Member
    Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
    13y
    Originally posted by Amanda Fox:
    @Anson Young Tell me if I'm prying too much, but are your MLS deals buy and hold? Do you follow the 70% x ARV rule? Are you networking with realtors? Your comment threw me for a loop since we were working the MLS for a long time and didn't yield anything. We must be doing something really wrong. :)
    @Sharon Vornholt Thank you for your comments!! The original 600 that we have sent 1 mailer to is an absentee, high equity list. We have been contemplating pairing down that list by taking steps to make it more valuable addresses (driving to look at them, doing further research), and eliminating a bunch of those. We only have a max of 1200 addresses total that we can afford to mail to, and we would supplement that paired down list with other higher value addresses (drive for dollars, probate or inheritance maybe). If we can only mail to 1200 addresses total, wouldn't it be better if they are 1200 really good addresses? But would you suggest we just keep mailing to that same general list and not pair it down?

    @Mark Ferguson Thank you so much for your comments, good to come back down to earth every once in a while!!

    I really can't say enough how much we appreciate the input and encouragement!!!

    @Amanda Fox - you arent prying too much, they are all fix and flips. We buy 97% of everything straight from the MLS, and will do a few dozen flip projects this year. Of course we know agents, we work the MLS every single day, multiple times a day, and have a good track record so we have agents who will hand us deals or will give us short sales, etc. We also put about 30-40 offers a week out besides our normal connections. We dont follow the strict 70% x ARV, because its not realistic in EVERY market. We have been working the MLS for 7-8 years now, so we have a bit of experience with it I'd say.

    Podcast Guest on Show #235
    0Reply
  • Amanda Fox
    OP
    Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
    13y

    @Karen Margrave Thanks so much for the background! I spent all morning looking for things that Karen Rittenhouse and Sharon Vornholt and others have written, but I can tell there are a lot more nuggets I need to dig up!

    We have worked so hard for so long at this business with 0 results, I think now when we get hit we get hit harder and it's a little harder to get up again. But you guys seriously are helping a ton, we have to keep believing that we will get there (so long as we continue to make smart, creative decisions)!

    0Reply
  • Amanda Fox
    OP
    Professional · Denver, CO · Member since 2013 · 69 posts · 29 votes
    13y

    @Anson Young Thanks so much for the heads up, congratulations btw, those are amazing results!!!

    0Reply
  • Anson YoungBusiness Member
    Flipper/Rehabber · Denver, CO · Member since 2009 · 1k+ posts · 726 votes
    13y
    Originally posted by Amanda Fox:
    @Anson Young Thanks so much for the heads up, congratulations btw, those are amazing results!!!

    Amanda, if you want to grab lunch or coffee sometime, let me know. I know you are new to the business, new to town and have alot at stake. Dont be discouraged!

    Podcast Guest on Show #235
    0Reply
  • Bryan L.
    Residential Real Estate Agent · Cookeville, TN · Member since 2013 · 1k+ posts · 948 votes
    13y

    @Amanda Fox - It's your life to live, but it looks like you're talking 10s of thousands per month in income. Is it really that expensive to live out west? I bet you can make a pretty good living on less than 10 flips per year. But it's yours to live, not mine. Best wishes.

    0Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    13y

    @Amanda Fox Part of your problem is probably like ours. When you are new to an area you area at a disadvantage to the other agents, investors, etc. that know your local market extremely well, know which areas are the most marketable, etc. Especially hard are the comps, when you are looking at the numbers it's hard to know if those numbers are homes that were sold to investors and will be remodeled and resold, or were they remodeled already? If you know the area, you know the history of pricing, and have a better idea of what that market will bear, newcomers are at a disadvantage. Sometimes you have to really dig into the information, look at the pictures, go to the property and try to get as much information as you can to get up to speed on the market. However; once you start studying the area, have been to the Open Houses, see the finish work and quality, and are familiar with pricing, and what that gets you, then you'll probably be much more successful in finding the "deals" you're looking for. Good luck.

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