I like what @Chris Uhler said but I personally wouldn't start out with $1,000 as a new investor. Really you can start with $25 or $50 a week and scale up from there. At least that's what I did and as I got more confident and got better at negotiating I just scaled up.
Basically $0 since I find most of my deals on the MLS. Well, I do have MLS fees of about $40 per month, but I also cover that with some Realtor income.
Will all do respect, I'm not sure how much you spend on marketing is a really an important question. What can you afford per month for 4-6 months, how big is your market, how many calls can you handle, how many deals do you want per month, etc. Bottom line, start with your goals and work backwords.
With that said, I'm assuming your talking about wholesaling?
Bryan- when you find a lead on the MLS, what is your next step? Do you reach out to the listing agent and or other routes etc?
Christopher- No disrespect taken. I am here to learn and think accurately and efficiently. I appreciate your feedback. I am learning to set a budget for myself because honestly at this moment I need to be efficient with my income. What was your goal starting out?
Yes, wholesaling.
Right now I would be fine with 1 deal every 2 months. Ultimate goal 2-3 a month seems reasonable. To me Miami is huge, so I need refine my search area.
I started with $1,000/month but after my first couple deals I've scaled to $2,500/month. How much could you spend for 6 months if you don't get a deal?
I like what @Chris Uhler said but I personally wouldn't start out with $1,000 as a new investor. Really you can start with $25 or $50 a week and scale up from there. At least that's what I did and as I got more confident and got better at negotiating I just scaled up.
At $25-$50 a week I personally would lose motivation really quick and it could take a long time to close your first deal. If I was on a shoe string budget I would drive and try and locate houses you can mail to or knock on their door.
Christopher Uhler had a good bit of money available. I started 2 months ago and did 300 worth of stamps and I mail to preforclosures. I happen to be a RE broker so I was able to list what I can't buy or wholesale. My first mailing I recd 19 immediate calls and some are still trickling in. I say start somewhere and stay with it. ( I'm talking to myself while talking to you , lol)
@Jose Diaz I don't know about your area, but trying to find deals on the mls here in Houston isn't a very good use of my time. I think many wholesalers and even rehabbers would agree. Before you know it, you're in a bidding war.
@Kim Book Not a bad response rate! Whatever you do, don't stop mailing.
@Christopher Uhler I am from the Houston area as well. My wife and I are beginning our journey into real estate investing and are interested in the best ways to find the deals in this area. We have had issues finding any deals on the MLS as well that arent at market price. If you dont mind sharing, what have you found to be the best ways in the houston area to market for the best deals? We are thinking to get started with finding wholesalers, and trying out yellow letters to begin with.
2014 has been my best year so far wholesaling and buying... so far ive managed to spend $2700 a month in marketing from Jan 2014-May 2104..... I send out between 5k-7k letters a month..
I have a bulk mailing permit from USPS..So it cost me roughly $300 per 1000 letters mailed...
I print my own letters ( not yellow letters) I use simple white copy paper. Which cost me $18.99 at costco and I get 2500 sheets in a box (I buy 3 boxes $57 not including taxes)....My letters are different they have a lot of color in them. But same concept as yellow letters...
I buy my envelopes from Walmart or Kmart a box of 100 envelopes cost me $1 each...I usually buy 80 boxes ($80 not including taxes)
And spend about $200 on ink I use fast draft printing, so I maximize my ink to the fullest.
And the rest I designate towards people stuffing and folding and stamping...
here in CA its a tough market and if I want to keep up, ill have to get to some where near $5000 a month...But the plus is here in CA one deal can net me a really big spread...
Oh and I usually get my list of targeted prospect free, It takes more time because its alot of foot work and chasing down I don't buy absentees AT ALL...
- I'm becoming more and more comfortable talking with potential sellers and also vetting people faster (i.e., tire kickers vs someone who is motivated). I had one slip away that listed with a Realtor. I have one right now that is a work in progress; hopefully that will come full circle and I'll get it. I do get discouraged as I wish I was popping off deals like it seems others do (and notice I said it seems- it's a perception that I know is not reality - this business takes work and hustle) but I also know that it will all come in due time and experience. I'm off in the summer so I intend to apply myself to this best I can for the next couple of months.
I takes roughly .40 cent to create letter, stuff and fold an mail out..
Postage .31 cent
Paper .01 cent
Envelope .01
Ink i cant really pin point the exact cost of that..But i have a really two really good printers and their set to get the best out of the ink usuage..I can get about 3000 (give or take) prints per $125 spent on ink...
and .05 per enveloped stuffed and folded...
Its cheaper to do you own, and you'd save alot more money. The only actual part i put energy myself into doing is to refill the printer with envelopes and paper...and change the ink when needed. I do two mailings per month. So i spend about 2 hours every 15 days siting at my computer changing ink and refilling envelope and paper trays...Youd save more time of course going thru a yellow letter service..But i like to save and if your just starting out this is a much managable way of doing this without breaking the bank...
I takes roughly .40 cent to create letter, stuff and fold an mail out..
Postage .31 cent
Paper .01 cent
Envelope .01
Ink i cant really pin point the exact cost of that..But i have a really two really good printers and their set to get the best out of the ink usuage..I can get about 3000 (give or take) prints per $125 spent on ink...
and .05 per enveloped stuffed and folded...
Its cheaper to do you own, and you'd save alot more money. The only actual part i put energy myself into doing is to refill the printer with envelopes and paper...and change the ink when needed. I do two mailings per month. So i spend about 2 hours every 15 days siting at my computer changing ink and refilling envelope and paper trays...Youd save more time of course going thru a yellow letter service..But i like to save and if your just starting out this is a much managable way of doing this without breaking the bank...
That's awesome! Just inspired me to do this myself. Do you mind telling us what kind of printer you use? Also what do you stuff envelope with?