Marketing when you don't have cash?

Question

Dear Experts

I'm currently in the education phase, and one thing that is constantly spoken about is the importance of and the different strategies involved in marketing.

I get it that the goal is to receive opportunities that you can turn into deals.

However, if I'm still saving up the cash for the down payment of my first investment, does it make sense to go out and market? What am I going to do with the opportunities that come my way?

Even, for experienced investors, would you always have cash ready to jump on opportunities?

I'm sure it's something basic but I'm not getting it.

Regards

Sachin Acharya

Kerry Baird · Answer

A few thoughts come to mind:  you could offer to buy the house from the owner using a lease option, or subject to the existing financing, or owner carry.  Not all funding options have to be cash out of your pocket.  You could line up a hard money lender, or transactional funding.  You could partner with someone who has cash, while you find the deals.  You could "bird dog" for an investor who is looking for a particular kind of property and would pay you for the lead.

With a couple of pre-foreclosures that I was mailing, I did have to come up with funds to make up the late payments and stop the foreclosure.  And I did the rehab on credit cards when I started out. Then again, I still use credit cards to keep track of the receipts of my improvements.

At any rate, there are a number of options available.  Handwrite a few letters to neighborhoods in which  you'd like to buy houses, and see what comes up.  Be a problem-solver.

Antonio Coleman · Answer

@Sachin Acharya Marketing is something everyone must spend a little money on. Some direct mail or even radio ads can not hurt you if constructed the right way. My goal is to send people to the website to get pre qualified.

Andy Cross · Answer

Ah yea, I get it. I just wanted to make sure I understood what you meant by that. I was thinking, you are "pre-qualifying" sellers' motivations somehow. If that makes any sense.

Antonio Coleman · Answer

@Andy Cross Lol, your website should be the voice that speak when you can't. It's all about having content that educate them on what you're looking for. There is no right or wrong way of doing it bro.

Sachin Acharya · Answer

@Rafael Norat

That's a great idea. In fact there is a meet up next week here. I will check with them.

By the way, I have in the meantime figured out that I can setup a company in one of the free zones here and through that structure partnerships. Having said I am still eager to hear from other investors who have used partners for buy and hold to learn how best to work out paying the partners back.

Thanks!

Sachin Acharya

Stephen Nicholson · Answer

I think marketing is important regardless of what area of investing you are getting into. If you cannot afford the few hundred dollars to send out a bunch of direct mail then you may need to rethink getting involved at this stage in your life. You dont need a lot of money to get started, but  you need some.

For example, my first set of direct mail was 250 letters. All in cost was only around $170 with $150 of that being postage.

Rafael Norat · Answer

@Sachin Acharya

Are there any local real estate groups your way? If not, I would suggest starting one. That way maybe you can find your partners and seasoned investors to better navigate through the local laws abit.

Best wishes!

Sachin Acharya · Answer

Hi Rafael

Here in Dubai, lot of the options that are easily available in the US are not available. For example, private lending is illegal. I am looking to buy and hold. The average rental yield for the country is 7.2% while the neighborhood I have chosen to focus yields about 9 to 10%.

The closing costs are quite high which makes having initial cash a basic requirement. Closing costs are usually around 16% of the purchase price, which means you need 116% in total. Banks are allowed to lend not more than 75%. So you need 41% in cash.

I am in the process of figuring out the local laws related to partnering. I would love to hear from experienced investors who have used partnership as a replacement for cash for buy and hold.

I am also working on getting my real estate agent license. This will allow me to learn more about the market, and legally qualify me to pass on opportunities to other investors.

Marketing when you don't have cash?

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